China oil product exports could see big jump as quotas surge
China's state-owned refiners could export up to 16.9 million mt (869,000 b/d) of refined products over August-December -- 44% more than the volume exported in the first seven months of the year, an analysis of latest information from industry sources and official data showed.
The Ministry of Commerce last week issued the fourth batch of export quotas for 2015 totaling 9.9 million mt of oil products -- triple the volume approved in the third batch and taking the total volume allocated so far for 2015 to 28.65 million mt, up 47% year on year, an industry source said.
The products covered under the export quota includes gasoil, gasoline, jet/kerosene and naphtha.
Chinese state-owned refiners need quotas or licenses from the government before they can export refined products.
These companies seek export quotas based on their requirements but they don't necessarily have to use up the allocated quotas.
The quotas, however, expire at the end of the year and cannot be rolled over.
In the first three batches, the ministry allocated 18.75 million mt, which when compared to the 11.75 million mt exported in the first seven months of the year -- based on data from the General Administration of Customs -- implies that the three state-owned refiners have 7 million mt of unused quotas still left.
Taking into account the unused and new quotas, Platts calculations show that the state-owned refiners can export up to 16.9 million mt of oil products for the rest of the year, 44% more than the volumes exported in the first seven months of the year.
Chinese refiners have been boosting oil product exports this year due to slowing domestic demand.
Exports in the first seven months of the year were up 10% year on year, GAC data showed. The export volume includes jet fuel put into bonded storage for sale to international flights.
The state-owned refiners can seek additional quotas even if they have not used their allocated quotas as the quotas are specific to products and refineries, and some refiners may have run out of quotas for certain products for the rest of the year.
Some refiners such as Sinopec's Hainan refinery and PetroChina's Guangxi refinery, were running out of export quotas before the latest release.
A source at export-oriented Dalian West Pacific Petrochemical Corp. in the northeastern Liaoning province also said that the refinery would likely need quota for export of another 100,000 mt of gasoline before the end of the year unless it was able to sell more in the domestic market.
Although the country has approved a record volume of exports so far this year, it is still likely to issue a fifth batch of quotas given the refiners' high appetite for exports, market sources said.
In the latest round, which comes just one month after the last batch of quotas was issued, China National Petroleum Corp. received a quota for 3.25 million mt in oil product exports, Sinopec for 6 million mt, and China National Offshore Oil Corp. for 650,000 mt.
- Published on:
- September 2, 2015
- Source url: