Due to insufficient production and impeded west-east transportation after the earthquake, a Japanese refiner plans to source fuel oil from China, according to a source with the refiner.
The refiner plans to source fuel oil with sulfur content low at 0.3%, high-sulfur 180CST bunker fuel oil and 380CST bunker fuel oil , for delivery to Japan's east coast, said the source. These resources will be supplied to power plants and contract buyers of bunker fuel oil, he said.
As the refiner does not have fuel oil storage in east coast, it can only purchase barge-sized cargoes and supply them directly to users, which restricts its supply source to East Asia, i.e. South Korea, North China and East China, he explained.
"It is possible for other Japanese refiners to face supply shortage, and the total demand for imported fuel oil is difficult to estimate yet. They may also have to seek supply from bonded tank farms in China's coastal areas," he said.
But bonded tank farms in East China, North China and Shandong do not have any low-sulfur fuel oil in stock, said a Chinese importer. As for the re-export of high-sulfur fuel oil, suppliers will probably be major bonded bunker players like Chimbusco, Sinopec and Brightoil, the importer noted.
The refiner source said fuel oil production may stay insufficient until April.
