Low-sulphur fuel oil futures contracts debuted on the Shanghai International Energy Exchange (INE), a subsidiary of the Shanghai Futures Exchange, on June 22. 

Four entities from Zhoushan have been designated delivery warehouses for low-sulphur fuel oil futures listed on the Shanghai bourse, according to the exchange's website. 

The four companies are Sinochem Xingzhong Oil Staging (Zhoushan) Co Ltd, Zhejiang Ocean Oil Products Warehousing Co Ltd, Dading Petroleum Logistics Co Ltd, and Yangshan Shengang International Oil Logistics Co Ltd.

The warehouses have received permission to begin dealing with low-sulphur fuel oil futures by the end of this year. They have a total storage capacity of 570,000 tons. 

This is the second time that the INE has selected Zhoushan as the destination for future delivery warehouses, after it designated three local entities as delivery warehouses for crude oil futures contracts in 2018. 

Industry insiders believe that low-sulphur fuel oil futures will help Zhoushan develop into an international bunkering hub and facilitate cross-border RMB settlement in the Zhejiang FTZ. 

Zhoushan now is home to delivery warehouses for both high-sulphur and low-sulphur fuel oil futures, which will help slash costs for local bonded oil supply enterprises and expand the development of the city's industrial chain, said Sun Chengchao, business manager of Sinochem Xingzhong Oil Staging (Zhoushan) Co Ltd. 

The low-sulphur fuel bunkering market has come about as a result of the International Maritime Organization (IMO) banning ships from using high-sulphur fuel unless equipped with scrubbers in January this year.