CHINA DATA: May gasoline exports fall 20% on year, jet fuel slumps 62% to 5-year low

Singapore — China's gasoline exports fell 20% year on year to a 14-month low of 680,000 mt in May, while jet fuel exports plunged 62% over the same period to a five-year low of 560,000 mt, General Administration of Customs data showed June 24.

Gasoline exports were last lower in February 2019 at 554,911 mt and jet fuel exports last lower in February 2015 at 559,750 mt, according to GAC data.

China's total export volume of the three key oil products of gasoline, jet fuel and gasoil was down 25% on year at 2.69 million mt in May, despite gasoil exports rising 16.2% over the same period to 1.45 million mt.

Sinopec, China's biggest exporting oil giant, slashed exports by more than half its usual level in May, two refining sources with the company said this week, adding the company preferred to sell its products domestically as prices in the international market were lower due to lockdowns, and freight costs were high.

Fellow refiner PetroChina made even heavier cuts to its exports, with its four main export refineries planning to export just 10,000 mt of gasoline in May after their exports averaged 1.28 million mt/month in 2019, S&P Global Platts reported earlier.

The significant reduction in jet fuel was likely due to heavy bonded exports in April, which filled the bonded tanks at China's international airports and capped availability for the May barrels, a Beijing-based analyst said.

GAC takes the jet fuel barrels for bonded fueling at China's international airport into account as exports. The volume in April was 2.03 million mt, a record high.

As a result, the total export volume for January-May at 24.43 million mt was up 6.8% on year, below the 12.7% year-on-year rise recorded for January-April, GAC data showed.

RECOVERY IN JUNE

In June, "as oil product prices recover in the Asian market, Chinese refiners' export margins improve, which will encourage them to lift exports from May's record lows in order to keep inventory at comfortable levels - although selling domestically is the priority given the higher much margins there," said Sun Jianan, analyst with S&P Global Platts Asia Analytics.

After combined gasoline, gasoil and jet fuel exports in May plunged 58.6% from April, Platts Analytics expected China to post a significant month-on-month increase in June to average just over 1 million b/d, up from 634,000 b/d in May, but still well below the 1.7 million b/d exported in April.

Other Beijing-based analysts estimated the gasoline export volume to rebound to 1.1 million-1.2 million mt in June, jet fuel to 1 million-1.1 million mt and gasoil to around 1.5 million mt.

"Among all these products, gasoline demand rebound is strongest in the region, which will attract more exports of the barrel from China," one analyst said.

Looking to the third quarter, China is expected to boost exports as regional demand recovers and domestic product inventory rises due to high throughput, analysts said.

China's combined gasoline, jet fuel and gasoil exports are forecast to exceed 1.4 million b/d over July-September, according to Platts Analytics.

China's key oil products exports ('000 mt)

Source: General Administration of Customs