China's Diesel Exports Jump to Record Amid Economic SlowdownBloomberg News
Diesel shipments rise to 1.11 million tons in September
Exports may remain more than 700,000 tons a month in 4Q: ICIS
China’s diesel exports surged to a record for a second month as refiners sought to lower stockpiles amid slowing industrial expansion.
Diesel shipments in September increased almost fivefold from a year earlier to 1.11 million metric tons, topping the previous record in August, according to data from the General Administration of Customs on Wednesday. Exports in the fourth quarter may remain at more than 700,000 tons a month, according to ICIS China, a Shanghai-based commodity researcher.
“The diesel export number is much higher than we forecast,” Lin Jiaxin, an analyst with ICIS China, said by phone from Guangzhou. “The government has granted ample export quotas and refiners are being encouraged to ship the fuel outside China to lower inventories.”
Refineries are maintaining high output to satisfy gasoline demand in the world’s largest auto-market even as slowing economic expansion and industrial production weakens diesel demand. Gross domestic product in the three months through September grew 6.9 percent from a year earlier, the slowest quarterly pace since the first three months of 2009, based on previously announced data. Industrial output last month rose 5.7 percent from a year earlier, missing the median estimate for 6 percent growth.
The nation’s apparent diesel demand rose 3.6 percent from a year earlier to 3.52 million barrels a day in August, the second-weakest pace in a year, data compiled by Bloomberg show. China’s diesel demand may drop 5 percent in the fourth quarter from a year ago, compared with a 5 percent increase for gasoline, ICIS China said in an e-mailed report on Monday.
“This is a trend we see continuing and is part of a transition occurring in the domestic refining slate,” Virendra Chauhan, a Singapore-based analyst at industry consultant Energy Aspects Ltd. said by e-mail. “The strength in demand for gasoline is creating a surplus of distillate products.”
The government awarded 9.9 million tons of oil-product export quotas in its fourth allocation this year, which is triple the volume approved in the previous allocation, according to Chauhan.
Singapore was the biggest destination for diesel exports in September with 453,562 tons, or 41 percent of the total, Wednesday’s data show. China’s kerosene exports also increased to a record high last month, up 40 percent from a year earlier to 1.25 million tons.
— With assistance by Jing Yang