Japan, a net importer of low sulfur fuel oil, exported more fuel oil in the week ended April 13 than it has in the last 20 months due to dwindling demand for the product from the country's utility companies, data released Wednesday by the Petroleum Association of Japan showed.
Cosmo Oil, the country's sole exporter of LSFO, over April 7-13 exported -- mostly to South Korea -- 11,749 kiloliters, or 130% more than the 5,109 kl of the low sulfur material that the Japanese refiner shipped out over the previous week, data showed.
Japan's weekly LSFO exports were last higher in the week ended August 6, 2011, when it shipped 54,063 kl of the product, Platts compilation of PAJ data showed.
"Demand from the utility companies is weak," said a Singapore-based trader at Cosmo. "They are relying more on coal and LNG as an alternative [burning] fuel."
Data released Friday by the Federation of Electric Power Companies showed that Japan's 10 major power utilities consumed a record 55.79 million mt of LNG in fiscal 2012-13 (April-March), up 5% from the previous high of 52.89 million mt in the preceding fiscal year, while they also consumed 50.24 million mt of coal in 2012-13, up 2% from a year ago.
In the year ended March 31, the Japanese utilities used 13.46 million kl or 232,000 b/d of crude, up 16% from a year ago, and 16.08 million kl or 277,000 b/d of fuel oil, up 36%, FEPC data showed.
"The Japanese people have been cooperating to reduce electricity consumption too, so the electricity demand itself is relatively lower," added the Cosmo source.
Overall power generation by Japan's 10 major utilities slid 1.5% year on year to 923,612 GWh in in the fiscal year ended March 31, FEPC data showed.
Meanwhile, LSFO demand for April-June from Tokyo Electric Power Company, Japan's largest fuel oil consumer, is likely to plunge 48-57% year on year due to scheduled maintenance at three power plants that primarily burn LSFO for power generation, Platts reported last week quoting fuel oil traders.
Tepco's LSFO demand, which was about 576,000 kl/month in April-June 2012, is expected to slump to 250,000-300,000 kl/month this quarter, traders said.
