China Diesel Exports Drop as Farm Sector Readies for Demand Peak
China’s net diesel exports fell to the lowest level in nine months as the government restricted shipments before demand peaks in the agricultural industry.
Overseas sales of the fuel exceeded imports by 119,181 metric tons in July, according to data e-mailed by the General Administration of Customs in Beijing today. That’s equivalent to 28,900 barrels a day, the least since October, when net exports declined to 107,277 tons, Bloomberg calculations show. It’s also 2.2 percent less than in June.
China, which consumes more oil than any country except the U.S., shipped fewer diesel cargoes after the government cut export quotas for China National Petroleum Corp. and China Petroleum & Chemical Corp. (386), its two biggest refiners. This is meant to ensure sufficient supplies before an expected increase in demand this quarter, according ICIS-C1 Energy, a Shanghai-based energy consultant.
“The country wants to tighten supply as September is the agricultural peak season for diesel,” Li Li, an oil analyst at ICIS-C1, said by phone from Guangzhou.
Agricultural consumption accounts for about 15 percent of China’s diesel demand, according to the consultant. The farming industry, which uses the fuel to run tractors and equipment, made up 7.5 percent of the nation’s economy in the first half of this year, official data show.
China’s imports of fuel oil, used by ships and so-called teapot oil refineries, dropped to 1.91 million tons in July, down 5.1 percent from a year earlier, according to today’s customs data. That’s the lowest level since last August. Overseas purchases of the fuel climbed 1.8 percent to 16.4 million tons in the first seven months.
Russia was the biggest fuel oil supplier to China after it shipped 567,990 tons, a 21 percent gain from a year earlier, the data show. Venezuela exported 332,012 tons, South Korea sold 265,850 tons and Singapore delivered 252,454 tons.
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