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China’s October gasoline, gasoil and jet fuel exports fell 7.3% month on month to 2.4 million mt but were still higher than the 13-month low of 2.03 million mt in August, data from the country’s General Administration of Customs showed late Nov. 18.
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The October figures brought the country’s exports of the three key oil products over January-October to 36.1 million mt, down 6.8% year on year, according to the customs data.
That means export quotas for November and December would be only around 1.51 million mt, suggesting a sharp drop in expected exports, sources said.
China’s Ministry of Commerce on Nov. 10 approved Sinochem and Zhejiang Petroleum & Chemical (ZPC) — two of the major fuel oil export quota holders — to transfer 230,000 mt and 380,000 mt, respectively, of their bunker fuel oil export quota to export gasoline, gasoil and jet fuel for the remainder of the year, S&P Global Platts reported earlier. This brought China’s total export quota for gasoline, gasoil, and jet fuel to 37.61 million mt.
China’s October gasoil exports fell by 27.9% on the month to 560,000 mt, and were slightly higher than the six-year low of 544,480 mt in August.
Refiners saved more barrels for the domestic market while boosting output to meet a local supply shortage when prices surged.
Chinese refineries raised gasoil output 12.4% month on month to a 15-month high of 14.52 million mt, or 3.49 million b/d, in October by both lifting production yields and increasing crude throughput, National Bureau of Statistics data released Nov. 18 showed, after Beijing called for action during the month to stem surging domestic gasoil prices.
State-run oil giants Sinopec and PetroChina announced end-October that they will adjust their gasoil export plans in November, while some refining sources within these companies have told Platts that they will suspend gasoil exports this month, thereby cutting the outflows.
But the outflow of the middle distillate will likely recover in December when supply rebounds and demand from transportation slows after the Nov. 11 cyber shopping festival. Seasonal snows in the northern part of China will also likely curb demand from construction sector.
S&P Global Platts Analytics estimated on Nov. 5 that China’s gasoil exports will drop to 92,000 b/d in Q4 from 220,000 b/d in Q3 and 452,000 b/d from the same period a year ago.
In October, gasoline exports recovered the most among the three key oil products to reach a four-month high of 1.01 million mt, up 9.8% on the month.
The outflows are likely to continue in November, since China’s domestic demand for gasoline has slowed due to the recent spike in COVID-19 cases amid the government’s zero-tolerance controls, leaving more barrels available for export.
Moreover, ZPC is set to use the quotas transferred from fuel oil to raise gasoline export, a company source told Platts.
The private integrated complex will increase light-end output during the rest of the year to maximize usage of its new 12 million mt of crude import quota issued on Oct. 25 by lifting its utilization rate from 70% in October.
Despite the rebound in October exports, the country’s total gasoline exports amounted to 12.8 million mt, still down 3.7% year on year over the first ten months of the year.
Jet fuel exports, on the other hand, posted the highest year-on-year growth, at 90%, and reached 830,000 mt in October as easing movement restrictions and quarantine requirements worldwide supported air travel demand.
However, the ensuing uncertainty has kept a lid on jet fuel exports. Over the first ten months of 2021, China’s total jet fuel exports were still 22.6% lower year on year at 7.02 million mt, according to GAC data.
Meanwhile, China’s demand for jet fuel remains subdued as demand for international flights departing from China has been weak due to the country’s strict policies to curb COVID-19.
China’s key oil products exports (Unit: ‘000 mt)
Source: General Administration of Customs
Notes: * was adjusted according to the % change provided by the GAC
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