At the midday print on Sept 19, the fuel oil front-month contract sits at ¥4,297/t, up 0.89% on the day, while bitumen holds at ¥5,432/t, up 1.53%. Both come off the vacuum residue at the tail of the refinery distillation train, but they leave the gate differently: fuel oil is blended into the marine bunker pool (VLSFO on the low-sulfur line, HSFO on the high-sulfur line fed by scrubber-fitted vessels), whereas bitumen goes into road paving and waterproofing stock. Bitumen's premium over fuel oil has stretched from roughly ¥900/t last week to ¥1,135/t today, a sign that residue is tilting toward the bitumen side.

The driver is mechanical. East and South China have entered the second-half infrastructure push, and liftings of modified and base bitumen are picking up. Under the IMO 2020 sulphur cap, HSFO demand is locked to scrubber ships, but the VLSFO-to-residue spread has compressed, thinning blend margins and pushing refiners to route vacuum residue into oxidation and molding for bitumen instead. For transshipment desks, fuel oil is one of the seven crude-linked pricing products; a shift in residue destination feeds back into tighter fuel oil spot discounts.

In execution this spread is not a standalone print. It moves with the Brent–WTI gap and landed crude cost: when heavy-sour discounts (ESPO, Urals, Basrah Light) widen, refiners run heavier, residue yield climbs, and both fuel oil and bitumen supply expand, which tends to narrow the spread. Today both crudes fell (Brent -1.2%, WTI -1.87%), yet the residue end stayed tight, meaning demand-side uptake (infrastructure plus bunkers) is absorbing more than the cost pullback released.