The Bohai Bay (Shandong, North and Northeast China) imported 0.98-1.00-mil mt of fuel oil in July, C1's shipping schedules show. This volume was sharply down by 30% from June imports published by the General Administration of Customs.
Local independent refineries showed weaker buying interest as the market trend was not clear after China lowered import tariffs and costs were rising amid strong international market, C1 found. In addition, they still had abundant feedstock stockpiles in July, after large imports in June.
Another reason for sluggish feedstock demand from independent refineries was that these refineries had increasing gasoil stock pressure amid weak demand. Gasoil demand became more sluggish after power supply shortage eased in the wake of heavy rain in June.
Among the estimated imports for July, 800,000-840,000mt was for Shandong, roughly 150,000mt for Tianjin in North China and around 20,000mt for Dalian in Northeast China.
By source, Bohai Bay's fuel oil imports in July were as follows-440,000-480,000mt from Russia, about 180,000mt from Venezuela, roughly 170,000mt from Panama, 130,000-150,000mt from Southeast Asia and around 40,000mt from South Korea.
In terms of specifications, about 96% or 950,000mt of the imports were straight-run fuel oil, and the rest 4% or about 40,000mt were mixed/cracked fuel oil, the shipping schedules showed.
The Bohai Bay's fuel oil imports are not expected to grow in August since the oil product market is still weak and independent refineries' refining margins are low.
