China data: May exports of key oil products fall 21% on month to 3.8 mil mt

China’s exports of key oil products fell 21.6% month on month in May, showed preliminary data from the General Administration of Customs, or GAC, on June 18. The fall in exports came as the major oil companies held more stocks at home to cater to domestic demand amid limited availability of export quotas and record-high crude throughput, market sources and analysts said.

The country exported a combined 3.8 million mt of gasoline, gasoil and jet fuel in May, down from 4.85 million mt in April and the 11-month-high of 5.08 million mt in March, the data showed.

During the same time, China’s crude throughput hit an all-time-high of 14.31 million b/d, rising 1.1% from April and 4.5% from the same month in 2020, data from National Bureau of Statistics showed.

Gasoil and jet fuel exports in May fell 38.3% and 13.4% month on month to 1.68 million mt and 570,000 mt, respectively, according to GAC data.

The fall in gasoil exports was higher than market participants’ expected cut of 23%. China’sOil companies had planned to export 1.89 million mt of gasoil in May, S&P Global Platts reported earlier.

However, the actual exports of gasoline stood at 1.55 million mt in May, up 5.4% from 1.47 million mt in April and higher than the 1.29 million mt in exports that was planned by the oil companies.

The higher-than-expected gasoline exports were seen amid Zhejiang Petroleum & Chemical likely doubling its outflow from the planned 50,000 mt for May, a source with direct knowledge of the matter said.

China’s gasoline and gasoil exports still saw year-on-year increases of 13.9% and 3.3%, respectively, in January-May, GAC data showed. Jet fuel continued to see a year-on-year drop of 59.8% in the first five months.

Limited export quotas

Total key product exports in January-May stood at 21.57 million mt, leaving only 7.93 million mt of quota available for outflows for the rest of the year until the new quotas are allocated, Platts data showed.

Among the quota holders, PetroChina would use over 85% of its first batch of quota in the first five months of 2021, while Sinopec, Sinochem, and CNOOC would use about 50% over the same period, according to Platts calculations.

Beijing is likely to limit the new quota allocation for rest of the year to below 10 million mt, Platts reported earlier. New quota allocation is expected by end-June.

In contrast, the total allocation for 2020 was 59.03 million mt, with 45.74 million mt actually exported.

As a result, China’s oil product exports for the rest of the year is set to stay at low levels.

Moreover, refineries are expected to save more barrels for the domestic market to compensate for the reduction in gasoline, gasoil blending stock imports.

Beijing also imposed consumption taxes on imported light cycle oil and mixed aromatics, which are key blendstock products, from June 12.

“This is also a reason for the fall in May exports despite higher domestic oil product output,” a Beijing-based analyst said.

China’s oil companies plan to cut gasoline and gasoil exports further in June, by about 24% and 18% from May, respectively, Platts reported earlier.
Source: Platts