China’s diesel exports fall to lowest level since mid-2023
Its refiners are expected to reduce diesel exports by more than 30% in October, amid a slowdown in the country’s growth and decarbonisation efforts
DIESEL exports from China have fallen to the lowest level since June 2023, as refiners grappled with a limited shipment quota and near break-even margins.
Cargoes dropped to 350,000 tonnes last month, customs data showed on Friday (Oct 18). This is less than half the level in August, and 71 per cent below the level in September 2023. There were 730,000 tonnes of petroleum exported – the least since April.
Refiners in Asia’s swing exporter of petroleum products have been hurt by a slowdown in nationwide growth, as well as the gradual decarbonisation of the country’s transport fleet.
Data on Friday showed that apparent oil demand fell by 7 per cent in September, underscoring the industry’s challenges.
In this environment, refiners have been reducing runs and paring diesel production.
They have about nine million tonnes of export quota left for the rest of the year out of 41 million, said energy consultant JLC. Beijing gave out a lower-than-expected shipment quota last month.
The margin on diesel exports from ports in South China was just 46 Chinese yuan (S$8.49) a tonne in September, lower than the margin of 82 yuan in August, indicated data from Mysteel OilChem.
Across the region, profits from producing diesel from crude – shown via “crack spreads” – fell to US$12 a barrel at the end of September, lower than last year’s profit of US$32 a barrel.
Chinese refineries are expected to reduce diesel exports by more than 30 per cent this month compared with September’s pace, said OilChem. BLOOMBERG
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