Chinese refiners produced about 1.4 million mt of VLSFO in March, up from 1.24 million mt in February, market intelligence provider JLC reported.

PHOTO: A night scene of Zhoushan, close to the dock on Putuo Island. Getty Images

The country's daily average VLSFO output rose by around 5%, both on a month-on-month and year-on-year basis, to reach 45,000 mt in March, JLC said. VLSFO production was lower in February because of the eight-day Chinese Lunar New Year holidays during the shorter month.

Higher VLSFO output from Chinese refineries has increased supply of the grade for bunkering in Zhoushan, with most suppliers recommending average lead times of 2-5 days, a source said.

Chinese refineries increased VLSFO production in March to fulfill export quotas, according to JLC. In January, the Chinese government allocated 8 million mt of VLSFO export quotas for bonded bunkering in the first round of 2024.

“Refineries hiked LSFO [VLSFO] production to make good use of export quotas when domestic diesel demand shrank and export margins for diesel were low,” JLC added.

By Aparupa Mazumder 

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