China's imports of No.5- No.7 fuel oil touched the five-year high at 22.44 million tonnes in 2023, soaring 83.5% year-on-year and lifting China's import dependence to 41%, data from the General Administration of Customs of the People's Republic of China (GACC) showed.
2019-2023 China Fuel Oil Import Dependence
Source: GACC and OilChem
The decline in China's low-sulfur fuel oil production and stronger demand for imported fuel oil contributed to an impressive increase in No.5-No.7 fuel oil imports in 2023, according to OilChem.
In detail, restricted by the low-sulfur fuel oil export quotas, domestic low-sulfur fuel oil production was cut by nearly 14.8% year-on-year to 13.20 million tonnes in 2023, putting an end to the continued increases over 2020-2022.
In addition, China's independent refineries purchased more imported fuel oil as feedstock, under the impact of insufficient crude oil import quotas and stricter inspection on the import of bitumen mixtures.
2023 No.5-No.7 Fuel Oil Imports by Country of Origin
Source: GACC and OilChem
Russia ranked first among all No.5-No.7 fuel oil suppliers, due to a boom in straight-run fuel oil demand from China's refineries. Domestic refineries showed rising demand for bonded bunker fuel, making Malaysia the second largest supplier of imports, followed by Oman, UAE, and Singapore. The combined imports of these five countries accounted for approximately 88% of the total, according to OilChem.
The main mode of trade for China's fuel oils No.5- No.7 imports in 2023 was bonded imports, with an import volume of 14.29 million tonnes, accounting for 63.7% of the total. The import volume of general trade goods stood at 8.15 million tonnes, occupying 36.3% of the total, according to OilChem.
Given the high prices of low-sulfur fuel oil in international market and an estimated growth in China domestic low-sulfur fuel oil production, OilChem predicts the imports of No.5-No.7 fuel oil in 2024 might inch down by 400,000-500,000 tonnes from last year. But the imports of Russia's straight-run fuel oil are expected to remain at a high level, and Malaysia will also maintain its position as an important supplier.
Written by Catherine Sun, sss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com