BEIJING: China’s gasoline exports fell 35.7% in July from a year earlier, customs data showed on Sunday, as refiners lowered crude runs and held back from shipments due to weakening profit margins.
Gasoline exports stood at 790,000 metric tons last month, or 5.77 million barrels per day, data from the General Administration of Customs showed. China exported 1.22 million tons of gasoline in July last year and 930,000 tons in June.
“Motor fuel exports remain capped because of weak margins and production, due to refinery run cuts,” said Emma Li, senior China oil analyst for Vortexa.
Export margins for gasoline were mostly negative between the second half of June and early July, roughly a loss of $3 to $4 a barrel for export sales, said a trader who declined to be identified as they were not authorised to speak to the media.
China’s January-July crude oil throughput was down 1.2% at 419.15 metric tons, the statistics bureau reported on Thursday.
“China will likely issue more product export quotas to boost refinery runs,” Vortexa’s Li said.
Beijing manages exports of gasoline, diesel and jet fuel under a quota system, issuing several batches of allocations during the year, mostly to state-run producers, and viewing product shipments to global markets as a tool to manage domestic supply and demand balances.
Jet fuel shipments led the fuel exports, rising 20.2% to 1.76 million tons up from 1.47 million tons in July last year. In June, Jet fuel shipments totalled 1.65 million tons.
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Jet fuel production rose 23.9% year-on-year during the January to July period, statistics bureau data showed on Friday.
Key oil majors are prioritising jet fuel production because of its more robust demand, given strong air travel performance domestically and international flight recovery, another trader said.
International flights rose 60% year-on-year in July to an average 2,111 daily, data from flight information provider Variflight showed. That represented 75% of the daily average for July 2019, before COVID-19.
Fuel provided to international flights is considered an export in customs statistics.
Diesel exports fell 41.2% on the year to 540,000 tons, a sharp drop from July 2023 when exports totalled 910,000 tons. In June, exports totalled 820,000.
Profit margins for diesel have improved in the last two months, but overall production has still fallen as refiners maximise jet fuel production.
Diesel output fell 4.7% to 119.39 million tons in January-July.
China’s domestic diesel consumption has also slumped because of weakness in property and manufacturing, coupled with a shift to liquefied natural gas in the trucking sector, and the weakness is expected to persist in the second half of the year.
The data on Sunday also showed China imported 5.90 million tons of LNG in July, up 1.1% from a year earlier.
China’s total exports of refined oil products, which also include marine fuel, were at 4.98 million tons for July, down 6% from 5.31 million tons in the same period a year earlier. Reuters
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