China’s exports of fuel products more than doubled in July from a year earlier, data showed on Friday, as refiners maintained high run rates and took advantageof strong export margins.
Exports of diesel, the biggest fuel by share of refinery output, totalled 910,000 metric tons, up 153.1% on last year’s 360,000 tons. Total diesel exports for the year so far are up 247.1% on last year.
Weakness in the country’s property and merchandise export sectors, visible in recent data showing sharply contracting new construction starts and sliding sentiment in the manufacturing sector, has weighed on domestic diesel demand.
Gasoline exports rose 39.0% to 1.22 million tons from 880,000 tons in July last year.
This is despite strong domestic demand for gasoline, which has picked up with the arrival of the summer travel season. Domestic gasoline inventories fell around 3% between mid-June and mid-July, according to data from China-based consultancy Longzhong.
Jet fuel exports reached 1.47 million tons, up markedly from 480,000 tons a year earlier, though China-related international aviation traffic continues to trail a healthy domestic flight market. Sales of kerosene to international flights are included in this export figure.
China’s total monthly refinery throughput reached the third highest level on record in July.
Total fuelexports, which also includes marine bunker fuel, surged 55.8% on last year to reach 5.31 million tons in July, customs data previously showed.
This was supported by strong arbitrage opportunities. Asian refining margins DUB-SIN-REF rose steadily through July to end the month at about $10.6/bbl – the highest level since late January.
“The broad pattern of China’s crude imports and product exports almost mirrors that of last year… with China importing not as much crude oil as in 2Q23 but exporting more petroleum products,” analysts from Citi wrote in a client note.
Markets participants are now awaiting the issuance of a third allotment of product export quotas for the year, following approval for 9 million tons of shipments in May.
Friday’s data also showed China imported 5.86 million tons of liquefied natural gas (LNG) in July, up 24.3% from last year’s 4.74 million tons.