Domestic fuel sales more profitable than exports in Q2
Jet fuel exports slip as global air traffic tumbles
Oil product exports to pick up from Aug to drain inventories
Singapore — Jet fuel and gasoil exports from China fell year on year in the first half of 2020 on weak demand due to the coronavirus pandemic, while gasoline exports grew 16.3%, data from the General Administration of Customs showed on July 23.
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Register NowDue to the lockdowns around the world to combat the spread of the virus, China's H1 jet fuel exports fell 8% year on year to 7.77 million mt despite a 37.5% month-on-month rebound in June to 770,000 mt from May's five-year low.
Sources in the aviation sector attributed June's month-on-month increase to the bonded export volume that supplied to Chinese airports for international flights rather than cargo exports.
"As China brings the pandemic under control, it is allowing more international flights than in the first quarter, lifting bonded jet fuel demand. But the jet fuel market remains weak globally, with high inventories, making it very difficult for the fuel to find homes overseas," a Singapore-based trader said.
June gasoil exports hit a 21-month low of 1.04 million mt, halving on the year and falling 28.3% from May, taking H1 exports 5.3% lower year on year to 11.35 million mt.
Gasoline exports rebounded 11.8% in June to 760,000 mt from May's 15-month low, resulting in a 16.3% year-on-year rise in H1 exports to 7.88 million mt.
Gasoline posting the only rise among key oil-products in H1 was also down to a 30.8% jump in January-April, GAC data showed.
Reluctant to export
However, Chinese refineries were reluctant to export due more lucrative domestic sales.
"On the domestic market, producers could earn an average $18/b in June for gasoline, gasoil sales, higher than the average export profit of $11/b in the month," a Beijing-based analyst said.
The gaps between the data from GAC and ship trackers remains wide, which is probably due to different methodologies because GAC data could be based on product clearing customs while ship trackers monitor the cargoes loaded, according to industry sources.
Data intelligence company Kpler said July 23 China's June gasoline and gasoil exports were 1.03 million mt and 542,000 mt, respectively. Jet fuel cargo exports were 74,000 mt in June, Kpler data showed.
China-based analysts expect China to boost its gasoline exports further to around 1.3 million-1.5 million mt, and gasoil up to 2 million mt in August as state-run refiners actively seek to clear the country's burgeoning oil product stockpiles with heavy rain and floods significantly denting domestic consumer and industrial fuel demand.
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July 23, 2020 at 05:26PM
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CHINA DATA: H1 jet fuel, gasoil exports down on coronavirus; gasoline up 16% - S&P Global
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