BEIJING, Nov.21 (Reuters) – China’s exports of clean marine bunkers, also known as ultra-low sulfur fuel oil (VLSFO), increased 22.6% in October from a year earlier, as the price differential between Zhoushan and Singapore narrowed and refiners acquired new export quotas.

Shipments of the fuel, which has a maximum sulfur content of 0.5% to comply with emission rules set by the International Maritime Organization, reached 1.49 million tonnes, data from the General customs administration.

This compares to 1.45 million tonnes in September.

Average VLSFO prices outside Zhoushan since September have fallen to an almost stable level or even a small discount from quotes in Singapore, the world’s largest bunkering port, data from Refinitiv showed.

Chinese refiners have increased their production of clean marine fuel, aided by a fiscal sweetener from Beijing that has helped Chinese ports offer increasingly competitive prices compared to Singapore.

Chinese consultancy firm JLC estimated that Chinese production of VLSFO reached nearly 9 million tonnes in the first 10 months of this year. The majors Sinopec and PetroChina contributed 60% and 33% respectively.

Beijing this month issued a new batch of export quotas for clean marine fuel of 1 million tonnes, bringing the total quotas for 2021 to 12 million tonnes. This is an increase from a total of 10 million tonnes last year.

Imports in bonded storage which include high and low sulfur supplies were 400,562 tonnes, according to customs data.

The table below shows China’s fuel oil imports and exports, all in metric tons.

The export column under the bonded storage trade largely captures China’s VLSFO bunkering sales along its coast.

Reporting by Muyu Xu, Cheng Leng and Shivani Singh; Editing by Richard Pullin and William Mallard

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