China’s building crash helps ease the Hormuz pain
The country’s drop in diesel demand has helped absorb the supply shock from the Middle East crisis
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JUST how little diesel can China get away with using? We are in the process of finding out.
The country’s refineries produced just 12.9 million tonnes of the fuel in June. Barring a couple of dips during the Covid-19 pandemic, that is the smallest figure since 2010. Asphalt is in a similar place, back to roughly its lowest levels since Xi Jinping’s presidency began in 2012.
That is a suggestive trend. No two petroleum products are more directly exposed to the construction industry than asphalt and diesel. Asphalt is used to seal roads to new developments and waterproof roofing materials. Diesel powers the fleets of cement mixers, excavators, work lorries and cranes used in putting up new buildings. (Petrol, in contrast, powers cars, motorbikes and scooters.)
