LSFO and LSWR Suppliers CFR Shandong (Qingdao, Dongjiakou, Yantai, Longkou)
The independent refiners' feedstock market: low-sulphur residue bought by Aframax and LR parcel when crude quota runs short
China's fuel-oil imports (HS 2710.19) were 21.6 million tonnes in 2025, 10.4% below the 2024 record, after the import tariff rose from 1% to 3% on 1 January 2025 and the consumption-tax rebate on fuel oil processed as feedstock was tightened, so that refiners run crude first and turn to fuel oil only when quota runs short. Within that total the clean refinery origins are the ones a buyer can document: Brazil supplied 1,041,204 t in 2025 at USD 482/t, up from 190,086 t in 2024, as Petrobras placed low-sulphur atmospheric residue in Shandong; Indonesia 689,600 t; South Korea 2,228,954 t; Singapore 3,310,484 t; and Brunei's Hengyi refinery 117,302 t of LSFO in 2024 at USD 596/t CIF. The buyers are the independent refiners of Weifang, Dongying, Zibo and Binzhou, which charge low-sulphur residue to residue FCC and delayed-coking units to make diesel and propylene without a desulphurisation bottleneck, and which need a fuel-oil import licence and a crude quota from MOFCOM to operate. Two grades are traded. LSWR is the atmospheric bottom of a sweet, waxy crude (Duri, Minas, Bach Ho and some West African grades): 0.15 to 0.40% sulphur, pour point +35 to +50 °C, 15 to 30% wax, vanadium under 15 ppm and nickel under 25 ppm, carried at 55 to 65 °C. LS SRFO or LSFO 0.5% is the straight-run or blended 280/380 cSt product: 0.30 to 0.50% sulphur, pour point +15 to +30 °C, vanadium under 35 ppm and nickel under 45 ppm.
CBIL brokers LSFO 0.5% and LSWR from Brazilian, Indonesian, Bruneian, Malaysian refinery, Nigerian and US Gulf refineries, CFR or CIF Qingdao (Dongjiakou or Huangdao), Yantai West Port, Longkou or Dongying, in 30,000 to 45,000 t MR and 80,000 to 130,000 t Aframax and LR2 parcels, priced against Platts or Argus Singapore Marine Fuel 0.5% or MOPS 180 cSt with a stated premium or discount. Fuels and feedstocks attract more fictitious offers than any other cargo, so the desk states its screening plainly: the producing refinery is named on the certificate of analysis, quality and quantity are certified by SGS, Intertek or an equivalent surveyor at the loading shore tank, the cargo loads from a refinery berth and not from a ship-to-ship transfer, the buyer gives its registered Chinese name and unified social credit code, and nothing is built on tank-storage receipts, dip tests, SCO, ICPO or FCO procedures or advance fees. Buyers and discharge terminals are checked against the OFAC, EU and UK lists before an offer goes out. A requirement that states the refinery, the grade with its sulphur, viscosity, pour point, CCR and metals limits, the discharge port, the laycan and the LC-opening bank gets a firm answer from a producing refinery; a round-number trial quantity from an unnamed buyer gets a question first.
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The market in figures
- China fuel-oil imports, HS 2710.19, 2025
- 21.6 million t (376,000 b/d), down 10.4% on the 2024 record
- Documented refinery origins, 2025
- Brazil 1,041,204 t @ USD 482/t · Indonesia 689,600 t · South Korea 2,228,954 t · Singapore 3,310,484 t · Brunei (Hengyi) 117,302 t in 2024 @ USD 596/t
- Discharge ports
- Qingdao Dongjiakou/Huangdao (VLCC, >23 m) · Yantai West Port (300,000 DWT) · Longkou (to 100,000 DWT) · Dongying (250,000 DWT SPM)
- Grades
- LSWR: S 0.15–0.40%, pour +35 to +50 °C, V <15 / Ni <25 ppm · LSFO 0.5% / LS SRFO: S ≤0.50%, pour +15 to +30 °C, V <35 / Ni <45 ppm
- Tax and tariff
- Import tariff 3% since 1 Jan 2025 (was 1%) · consumption tax RMB 1.2/litre (c. RMB 1,218/t) with a capped rebate on feedstock use
Landed values are the importing country's declared CIF, not CBIL prices.
Questions buyers ask
- Why do Shandong refiners buy fuel oil at all when they have crude quota?
- Because the quota is finite and the secondary units are not. MOFCOM allocates non-state crude import quota in batches each year, and once a refiner has used its allocation it can keep its residue FCC and delayed coker running on imported straight-run fuel oil or waxy residue bought under a fuel-oil import licence. That is why the flow rises and falls with quota timing, and why 2025 imports fell when the tariff went to 3% and the consumption-tax rebate was cut: the arithmetic only works when the discount to crude covers the un-rebated tax. A buyer who cannot say which unit takes the residue and whether it holds the licence is not the buyer.
- What is the difference between LSWR and LSFO 0.5%?
- LSWR, low-sulphur waxy residue, is the atmospheric bottom of a sweet waxy crude such as Duri or Minas, sold by the refinery under a named grade (Pertamina's V-500 and V-1250 are the reference). It is low in sulphur (0.15 to 0.40%) and metals but has a pour point of +35 to +50 °C, so it needs heated tanks and coils from load to gate. LSFO 0.5% is the finished or straight-run fuel oil at 0.5% sulphur maximum, 180 to 380 cSt, pour point +15 to +30 °C, which a refiner can crack or a blender can sell as VLSFO. The refiner's choice depends on the coker's metals tolerance and the cutter stock it has; state the unit and the limits on vanadium, nickel, CCR and asphaltenes in the enquiry.
- How is a genuine offer told from a fabricated one?
- By where it loads and who signs the assay. A genuine cargo loads from a refinery shore tank at Santos or Rio, Dumai or Balikpapan, Lekki, Melaka or the US Gulf, with a certificate of analysis from the refinery and an SGS or Intertek certificate at that tank. The refinery, or its trading arm, sells it by tender or direct to a named principal, and payment is a letter of credit to the refinery's own account. Offers that come with tank-storage receipts, dip-test procedures, SCO/ICPO/FCO sequences, a 'private allocation', discounts of USD 30 to 60/t under the Singapore benchmark, or a load port that is a ship-to-ship position rather than a berth, are not offers CBIL works.
- Which discharge ports and parcel sizes work?
- Qingdao (Dongjiakou or Huangdao) and Yantai West Port take Aframax, LR2 and VLCC tonnage and connect by pipeline and rail to the Weifang, Zibo and Dongying refiners; Longkou takes up to 100,000 DWT and Dongying's offshore SPM 250,000 DWT with the inner harbour under 50,000 DWT. Parcels are 30,000 to 45,000 t on an MR for LSWR from Indonesia or Malaysia and 80,000 to 130,000 t on an Aframax or LR2 from Brazil, West Africa or the US Gulf. The discharge terminal is named in the enquiry, because one Rizhao crude terminal was designated in October 2025 and the desk fixes only to berths that pass the list checks.
- How is the price expressed?
- As a differential to a published benchmark, not a flat number: Platts or Argus Singapore Marine Fuel 0.5%, or MOPS 180 cSt, plus or minus a premium in USD/t, CFR or CIF the named port, with the pricing window (typically the five quotations around bill of lading date) written into the contract. The premium reflects grade, metals, pour point and the laycan. CBIL does not publish a level: a refiner's price is given against a named buyer, port and laycan, and it is valid for the hours the seller says it is.