China was estimated to import about 2.01-mil mt of fuel oil in February. This volume was down about 17.3% or 420,000mt from January imports published by the General Administration of Customs, but up around 11.1% year-on-year.
Chinese importers showed weaker demand for February fuel oil imports after large stock replenishment in January, also because of high import costs when the market trend was not clear amid fluctuating international crude, C1 found.
Most Chinese buyers switched their interest to relatively low-cost Venezuelan fuel oil, which led to much larger imports of such resources. As much as about 630,000mt of Venezuelan fuel oil flowed to China this month, up 43% on month, C1's shipping schedule shows.
In contrast, importers' demand for other fuel oil cargoes declined due to high prices.
Similar situation appeared in 2008 when Singapore fuel oil prices kept climbing after international crude while domestic independent refineries were trapped in deeply negative refining margins. As a result, Chinese buyers switched to Venezuelan fuel oil while they purchased much less fuel oil from other countries.
China is expected to trim fuel oil imports further in March, particularly those from the Far East because of high costs.
