CHINA DATA: Nov gasoline flows to Singapore buck negative trend to almost double on month

China's gasoline outflows to Singapore bucked the overall negative trend to almost double in November from the month before, partly making up for the slowdown in flows to Pakistan and the Philippines, detailed data released by the General Administration of Customs Dec. 22 showed.

Traders said a lot of the outflow to Singapore may be ultimately headed to Indonesia, where demand was showing signs of recovery.

China's gasoline outflows to Singapore rose 90.5% month on month to 297,000 mt in November, but were still down 50.5% from the same month a year earlier. The month-on-month increase to Singapore came amid a 19.9% month on month fall in outflows to all origins to 808,000 mt in November as oil companies slashed exports in order to ensure domestic supplies.

The sharp month-on-month increase took China's cumulative exports to Singapore over January-November to 5.32 million mt, maintaining it as the top destination for China's gasoline outflows over the period, but was down 29.7% year on year.

Market sources said Indonesia's gasoline appetite in November was robust and would have surpassed 12 million barrels, and increased demand from Indonesia was possibly a reason for the uptick in China's gasoline exports to Singapore.

Enterprise Singapore data showed that Singapore exported 675,589 mt of gasoline to Indonesia over Oct. 28-Dec. 1.

The front-month FOB Singapore 92 RON gasoline crack against Brent swap averaged $8.28/b in November, down $1.32/b from October $9.60/b, but $1.34/b higher than the $6.94/b averaged over January-November, S&P Global Platts data showed.

On the physical front, the FOB Singapore 92 RON gasoline crack against front month ICE Brent crude futures averaged $10.90/b in November, down from $12.22/b in October, but $3.68/b higher than the January-November average of $7.22/b, Platts data showed.

While China's gasoline exports to Pakistan fell in November, exports over January-November surged 383.5% year on year to 1.849 million mt from just 383,000 mt a year earlier.

As a result, Pakistan received about 13.6% of China's total outflows over the 11-month period, up from 2.6% a year earlier. Sources said this uptrend was likely to continue in 2022, with PetroChina, which has signed term contracts with Pakistan State Oil, likely to remain one of the major suppliers.

PetroChina has been China's major exporter of gasoline, accounting for around half of the outflows each month, mostly from its refineries in northeastern China where supplies have largely remained in surplus.

Gasoil exports rebound

China's gasoil exports rebounded 7.5% month on month to 599,000 mt in November despite oil majors having planned to slash exports in the month due to severe shortages in the domestic market.

Some sources said there were some last-minute adjustments to export plans toward the end of the month as domestic supply in some regions stabilized.

Accordingly, exports to Bangladesh and Pakistan rose to 111,000 mt and 40,000 mt, respectively, in November from zero a month earlier.

Exports to Bangladesh over January-November rose 52% year on year.

However the Philippines was the top destination for China's gasoil exports over January-November at 4.27 million mt of gasoil, up 14.9% year on year.

Singapore, which had been the top destination for China's gasoil outflows in recent years, was overtaken by Australia, which received 2.3 million mt of gasoil from China in the 11-month, ahead of Singapore at 2.285 million mt.

China's total gasoil exports over January-November fell 7.6% year on year to 16.88 million mt, outpacing the 6.4% year-on-year drop for gasoline to 13.6 million mt.

Additional gasoil export volumes from China over November and December have helped to ease previously tight regional supply balances. As a result, Asian gasoil prices have eased from multi-month highs in H1 November.

Market participants said that despite growing demand destruction concerns sparked by fears over the omicron variant of the coronavirus, the Asian gasoil market was expected to remain steady for the moment, with the additional barrels being largely absorbed by robust regional demand.

"The headlines on omicron, yes, places like UK and Denmark are all publishing about pretty severe situation there, but January still feels pretty tight from my perspective as there's firm demand from Australia," a trader said.

Top destinations for China's gasoline, gasoil exports

(Unit: '000 mt)

Gasoline sales outlets:

Gasoil sales outlets:

Source: General Administration of Customs

Notes: *include exports to other countries