China's VLSFO supplies are increasing. File Image / Pixabay
China's output of fuel oil surged in April, according to state-run press agency Xinhua, after tax changes have incentivised the country's domestic refiners to increase their supplies to the bunker market.
Fuel oil output gained 68% on the year to hit 3.09 million mt in April, Xinhua reported Sunday, citing data from China's National Bureau of Statistics.
China has applied a long-awaited rebate on value added tax on fuel oil from February this year, incentivising domestic refiners to produce very low sulfur fuel oil 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.