China’s fuel oil imports receded in July as refiners resumed using diluted bitumen after customs authorities eased months-long inspections, which replaced some demand for fuel oil, data from the General Administration of Customs showed on Sunday.

Total fuel oil imports in July were 1.6 million metric tons, versus 2.7 million tons in June, which was a decade-high.

The imports included purchases under ordinary trade, which is subject to import duty and consumption tax, as well as imports into bonded storages.

China’s independent refiners have boosted purchases of fuel oil to be used as a refinery feedstock this year, particularly discounted barrels of Russian fuel oil, as customs in refining hub Shandong increased inspections on oil under diluted bitumen since April and prompted refiners to seek alternatives.

But as imports of diluted bitumen, mostly heavy crude oil from Venezuelan, recovered in July, demand for fuel oil started to wane. Customs data showed that 1.38 million tonnes of diluted bitumen entered China last month, the highest level in four months.

China’s exports of low-sulphur marine fuels, measured mostly by sales from bonded storage for vessels plying international routes, totalled 1.54 million tons last month, down 20% from June and dipping 3% from a year earlier.

China’s merchandise exports fell 14.5% in July year-on-year, while imports contracted 12.4%, in the worst showing for outbound shipments from the world’s second-largest economy since February 2020.
Source: Reuters (Reporting by Aizhu Chen and Muyu Xu; Editing by Kim Coghill)