China's share of the bunker market is climbing this year after a jump in domestic production. File Image / Pixabay
With the growth in domestic very low sulfur fuel oil (VLSFO) production in China, bunker sales by leading supplier Sinopec at the country's ports are heading towards 4.8 million mt/year, according to price reporting agency S&P Global Platts.
Sinopec's sales currently take up about 40% of the 1 million mt/month of bunker fuel currently being sold at Chinese ports, Platts reported Thursday, citing traders in the region.
China has applied a long-awaited rebate on value added tax on fuel oil from February this year, incentivising domestic refiners to produce VLSFO in large quantities.
Exports in the form of bunker sales at Chinese ports have already begun, and prices at Zhoushan dropped to a discount to Singapore's levels last month as supplies increased.