China’s gasoline exports fall 44% on loss margins

China’s gasoline exports fell 44 percent in August from a year earlier as export margins turned negative and refiners began using their government-mandated export quotas.

China exported 770,000 tons of gasoline last month, down 44 percent from August 2023, according to Chinese customs data cited by Bloomberg.

Refiners are facing weak refining margins and low and sub-zero export margins for fuels amid weaker-than-expected demand in the region.

In addition, refiners and fuel sellers are estimated to have already used about 80 percent of their export quotas for this year, according to Bloomberg estimates.

The margin on gasoline exports for Chinese refiners fell to -$16 (-111 Chinese yuan) a tonne last month, according to Mysteel OilChem data cited by Bloomberg. To compare, gasoline exports had a profit margin of more than $34 (240 yuan) per ton in July.

Refining margins have also fallen in recent weeks in Asia and China, with Chinese refining output falling.

Refining margins in Asia fell in the first week of September to their lowest level for this time of year since 2020, which could lead to more run rate cuts at Asian refiners, including in China.

In August, Chinese refiners were estimated to have processed about 12.6 million barrels per day (bpd) of crude, down nearly 10 percent from July and down 17.5 percent from last August, they wrote ING commodity strategists Warren Patterson and Ewa Manthey. in a note earlier this week.

The figures suggest apparent oil demand fell below 12.5 million bpd, down more than 15% year-on-year and the weakest level since August 2022.

As margins fall and fuel supply rises amid falling demand, analysts expect further reductions in refining utilization going forward, which does not bode well for oil demand in the world’s top growth market, Asia .

By Charles Kennedy for Oilprice.com

More top reads from Oilprice.com