July 12th, in the second half of the year, we expect that China’s imported fuel oil will be difficult to maintain at a high level.
There are two reasons: first, China’s non-state-run fuel oil import allowance is 16.2 million tons, and the current quota completion rate has exceeded 80%. If there is no additional quota, it means that the remaining quota will be allocated to an average of only 500,000 tons per month in the second half of the year about;
Second, after the third batch of crude oil import quotas were issued to local refineries in June, the shortage of processing raw materials was alleviated, and as the high-sulfur cracking price spread has reached a relatively high level, its economy as a refinery processing raw material has weakened It will also reduce the enthusiasm of refineries to import.
In the context of OPEC+ production cuts, the marginal tightening of medium and heavy crude oil is expected to be relatively certain, and we believe that this will also lead to a contraction in the marginal supply of high-sulfur fuel oil resources.