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Japan is expected to import around 30,000 tonnes of high sulphur fuel oil during the month of May, according to market sources.

The East Asian country, which is typically an exporter of high sulphur fuel oil (HSFO), has seen a rise in imports due to an increase in power plant consumption and bunker demand.

Marine fuel demand at Japanse ports has risen since the start of the year partly due to an increase in the number of bulk carriers transporting iron ore and coal, which is in line with the rise in the country's steel output.

According to the Ministry of Economy, Trade and Industry, sales of marine fuel in Japan during the month of March reached a one-year high of 478,946 kilolitres (kl).

The rise in demand is also expected to have resulted in healthy profit margins for Japanese trading houses importing fuel oil cargoes, typically from South Korea, for resale into the local bunker market.

The average price of 380-centistoke (cst) fuel oil has risen in recent months, increasing from $505 per tonne in March to $528 per tonne in April. The average 380-cst price for May so far is slightly higher at $532 per tonne, according to Bunker Index price data.

Meanwhile, the average price for 380-cst cargoes in May has averaged around $470-$472 per tonne with freight costs between South Korea and Japan at approximately $15-$20 per tonne.

In the utility sector, Chugoku Electric Power Company last month increased fuel oil consumption at its power plant in West Japan following the suspension of operations at two nuclear units. As a result, the utility is reported to have been consuming an additional 20,000-30,000 kl of HSFO since last month.