CHINA GASOIL EXPORTS

0000-00-00

China's March diesel exports hover near record on high stocks

China's diesel exports in March hovered near a record level, data showed on Sunday, as companies battled to ease brimming
domestic inventories.
 Diesel shipments totalled 2.81 million tonnes last month, versus previous monthly record at 2.83 million tonnes in March 2020, data from the General Administration of Chinese Customs showed. 
 Exports of gasoline, however, eased 14.6% from a year earlier to 1.56 million tonnes, compared with 1.83 million tonnes in March 2020 when the COVID-19 pandemic had dampended Chinese demand for the motor fuel.
 "Diesel supplies way exceeded demand resulting in very high stocks and also the lowest wholesale prices in several years," Wang Zhao, senior analyst with consultancy Sublime Information Group, said ahead of the data release.

    "Gasoline is a lot more balanced."
    Jet fuel exports fell 51.6% on year to 0.71 million tonnes as international
flights remain in the doldrums, although domestic air travel is strong.
    The data also showed imports of liquefied natural gas (LNG) increased 36.5%
on year to 5.64 million tonnes in March, although the winter heating system in
the world's second-largest buyer typically ends in mid-March in northern China.
    Below details fuel exports and imports of LNG in millions of tonnes, with
percentage changes as provided by customs.

 Exports (mln    March          y/y %    Jan-March       y/y %
 tonnes)                        change                   change
 Gasoline                 1.56   -14.6%            5.09     12.1%
 Diesel                   2.81    -0.6%            6.25     -0.8%
 Jet fuel                 0.71   -51.6%            1.59    -63.9%
 Import (mln     March            y/y %  Jan-March          y/y %
 tonnes)                        change                     change
 LNG                      5.64    36.5%           19.55     28.8%

REFINERY NEWS ROUNDUP: Maintenance and closures in focus in Asia-Pacific

2021-04-01

Gasoline:
Asian gasoline margins rose to a two-week high after two refineries in the region suffered from unplanned shutdowns. Asia-Pacific's largest gasoline buyer Pertamina shut its 125,000 b/d Balongan refinery after a fire hit its storage tanks and is likely to remain shut for around 4-5 days, causing an estimated production loss of around 400,000 b/d. Japanese refiner Eneos shut down all units at its 127,500 b/d Wakayama refinery because of a fire and it is unclear when it will resume operations.
The Suez Canal blockage has had a limited impact on gasoline markets in the Mideast Gulf and Asia.
Oman has re-introduced an overnight ban on the movement of people and vehicles and extended a night-time curfew for all commercial activities by another 11 days, in response to a worsening Covid-19 situation.
Singapore's light distillate inventories, comprising mainly gasoline, fell by 5.53pc to an eight-week low of 14.65mn bl in the week to 24 March, according to data from government agency Enterprise Singapore. The inventories edged down with lower imports from major supplier China and a surge in exports. 
 Gasoline held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub increased by 2.2pc to 1.414mn t in the week to 24 March, according to consultancy Insights Global. Stocks rose on the back of cargo arrivals, while exports to west Africa fell on the week and departures to the US Atlantic coast were steady. But transatlantic arbitrage economics have narrowed in recent days.
 
Naphtha:
Asian naphtha margins weakened after South Korean petrochemical producer LG Chemical shut its naphtha-fed side cracker at Daesan on 28 March following technical problems. The shutdown is expected to last for two weeks until 10 April.
Japanese imports of naphtha increased in February, despite slower operations at the country's ethylene crackers. Japan boosted naphtha imports from its regular suppliers in the Middle East. Qatar was the top exporter to Japan in February, with its supplies rising by 4.8pc on year to 314,791t. Imports from the US also grew last month.
Lotte Chemical Titan, the Malaysian unit of Lotte Chemical, has issued another tender to buy May-delivery cargoes. It sought at least 25,000t (223,000 bl) of naphtha for first-half May delivery to Pasir Gudang. 
Indian state-controlled refiner Hindustan Petroleum (HPCL) offered another naphtha cargo for April loading. It offered a 25,000t cargo for 11-13 April loading from Visakhapatnam.
 
 
Jet fuel :
Mideast Gulf jet fuel fundamentals came under pressure following the disruption of the Suez Canal. Around 4mn bl of jet fuel booked for Europe from the Mideast Gulf and India might sail around Africa because of the Suez disruption.
Italy's Eni is considering converting the ageing 70,000 b/d Mombasa refinery into a biofuels plant, according to Kenyan President Uhuru Kenyatta. A feasibility study is being conducted by the company to produce biodiesel, ethanol and sustainable aviation fuel from used cooking oil, sugar cane and other locally sourced materials.
Mombasa, east Africa's only refinery, shut in 2013 after India's Essar dropped upgrading plans, leaving the state to be the sole owner. The government is seeking a partner to rehabilitate the plant to process crude from the South Lokichar project, where London-listed Tullow Oil is targeting a final investment decision in 2022 and first oil in 2024.
 
Gasoil:
India exported 2.11mn t (562,000 b/d) of diesel in February, up by 0.5pc from 559,000 b/d in January but 8.5pc lower than 614,000 b/d exported in February 2020, according to oil ministry data.
Gasoil exports from India are expected to be strong in March, with state-controlled refineries, including the country's biggest refiners IOC, Bharat Petroleum and MRPL offering up to 290,000t of March-loading gasoil cargoes so far.
The east-west spread — the difference between front-month Singapore gasoil swaps and the front-month Ice gasoil contract — stood at a seven-month low -$4.79/t on 26 March. The disruption in westbound shipments of east of Suez gasoil cargoes supported prices in Europe and weighed on prices east of Suez, as attempts to free the container vessel Ever Given lasted until 29 March. 
At least one diesel tanker was observed departing on the route round the Cape of Good Hope instead of waiting for the Suez passage to clear. The east-west spread narrowed to $4.45/t on 29 March as the stricken container vessel Ever Given was re-floated. But a few vessels from east of Suez will face some delays as they departed on the route around the Cape of Good Hope instead of waiting for the canal to clear. The Al Yamamah, loaded with 29,700t of gasoil from Kuwait's Mina Abullah on 22 March, is pointing towards Africa instead of the Red Sea, signalling it is beginning detours around Africa.
Formosa offered spot gasoil cargoes for early-May loading. It offered through a spot tender one 750,000 bl cargo of 10ppm sulphur gasoil for 1-5 May loading from Mailiao, Taiwan.

Cloudy outlook for stalled jet fuel demand recovery

2021-02-22

Hopes of a speedy aviation recovery this year have been knocked back by global travel restrictions after the emergence of new coronavirus variants and a slower than expected vaccination roll-out, dimming the outlook for jet fuel demand and oil prices.

Jet fuel suffered the biggest demand decline among oil products as aviation activity collapsed last year and is seen by market participants as one of the main factors influencing 2021 oil demand growth, given the lingering uncertainties.

Almost 10 per cent of total oil demand in OECD (Organisation for Economic Co-operation and Development) countries was for jet fuel in 2019, dropping to 6 per cent in 2020, International Energy Agency (IEA) data shows. By comparison, petrol demand remained around 30 per cent in both 2019 and 2020.

Goldman Sachs last month lowered its forecast for first-quarter global oil demand by 700,000 barrels per day (bpd), or 0.7 per cent of total consumption, mainly because of renewed travel restrictions.

Oil Major Total Sees 10 Million Bpd Supply Gap In 2025

2021-02-11

France's supermajor Total is warning that the world could find itself with a shortfall of supply of 10 million barrels per day (bpd) between now and 2025, due to continued underinvestment in the industry, the OPEC+ pact, and cracks in the U.S. shale business model.

"There is a risk of supply crunch in the mid-term," Helle Kristoffersen, President, Strategy and Innovation at Total, said on the company's Q4 earnings call this week.

"We have seen in 2020 how OPEC managed to bring back market discipline. We've seen the cracks in the US shale model, and we've seen a continued underinvestments in the oil industry as a whole," Kristoffersen said.

The market needs new oil projects, considering the fact that many producing oilfields will see natural declines in production, the executive said.

"And that's true, even if you take very cautious view on short-term demand recovery and on future demand levels," Kristoffersen added, noting that "a 10 million barrels per day gap in supply between now and 2025, that's a massive shortfall of supply to cover in just a very few number of years."

Last year, the coronavirus accelerated a structural decline in upstream oil investments as all E&P firms, oil supermajors, U.S. shale producers, and national oil companies alike, slashed capital expenditures in the wake of the price crash.

Investments in new oil supply have now slumped to a more-than-a-decade low.

OPEC+ currently has a lot of spare capacity that could come on stream when demand recovers. But sustained investments in oil and gas will be needed to meet global consumption of oil, which the world will continue to need, peak demand or not, analysts and forecasters warn.

"The world may be sleepwalking into a supply crunch, albeit beyond 2021. A recovery in oil demand back to over 100 million b/d by late 2022 increases risk of a material supply gap later this decade, triggering an upward spike in price," says Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie. 

TENDER OFFERING A SPOT

2021-02-04

Gasoline:
Chinese private refiner Hengyi has offered its first March-loading gasoline cargo. It offered 33,000t (278,850 bl) of 88R gasoline for 6-8 March loading from Brunei. The Chinese private-sector refiner operates a 175,000 b/d refinery in Brunei and has plans to expand its refinery by adding 280,000 b/d of refining capacity. Hengyi holds a 70pc stake in the Brunei refinery, with the Brunei state owning the remaining 30pc.
Indian state-controlled refiner MRPL has sold through a tender high-Ron gasoline for February loading, after skipping January offers. It sold a 25,000t 95R gasoline cargo for 16-18 February loading from New Mangalore.
Gasoline demand continues improve in India. Gasoline was the only transportation fuel whose demand rose year-on-year despite the country undergoing a recession as it struggles to contain the Covid-19 outbreak. Gasoline sales rose by 6pc from a year earlier to 642,000 b/d in December. Diesel and jet fuel consumption fell 2.3pc and 44pc, respectively.
 
Naphtha:
Taiwan's private-sector refiner Formosa has bought light naphtha cargo for March delivery. It bought an unknown amount of naphtha for 21-31 March delivery to Mailiao.
Formosa has also concluded its tender to buy heavy full-range naphtha cargo for March delivery. It bought a 30,000t heavy full-range naphtha cargo for second-half March delivery to Mailiao, said market participants. South Korea's petrochemical producer Lotte Chemical has cargoes for March delivery. It sought 28,000t of naphtha or 25,000t of naphtha for 16-31 March delivery to either Yosu or Daesan. South Korean petrochemical producer KPIC has sought naphtha for March delivery. It sought at least 25,000t for second-half March delivery to Onsan.
 
Jet fuel:
MRPL has sold through a spot tender its second jet fuel cargo for February loading. It offered one 40,000t (315,000 bl) cargo for 23-25 February loading from New Mangalore on India's west coast. Vitol could have won the cargo, although this could not be confirmed. Saudi Arabia has banned arrivals from 20 countries, effective 3 February, as it tries to combat the spread of Covid-19. The move comes just days after Riyadh pushed back a planned full reopening of its borders by six weeks, to mid-May, and deals a further blow to prospects for an increase in regional jet fuel demand.
 
Gasoil:
China's Wepec has offered through a spot tender one early March loading cargo. It offered a 40,000t (298,000 bl) cargo of 50ppm sulphur gasoil for 1-3 March loading from north China's Dalian.
China's domestic refineries, including state-controlled and independent ones, have scheduled heavy maintenance schedule during March-May. Market participants expect that 1.3mn-1.4mn b/d of Chinese refining capacity will be brought off line during March-April, which will provide relief to the weakness in domestic transport fuel demand during the lunar new year period.
India's biggest state-controlled refiner IOC has issued a spot tender for two combined cargoes of high-speed diesel (HSD) and light-cycle oil (LCO) for loading from Paradip on India's east coast. It offered one 15,000-16,000t cargo and one 32,000-35,450t cargo for loading during 28 February-1 March.

Sinopec exports diesel from Jinling refinery

2021-01-27

The 250,000 bl cargo left the Nanjing Qingjiang terminal in Jiangsu on 25 January and is headed for the Philippines.

China is ramping up diesel exports amid domestic oversupply. The Huajin Petrochemical refinery at Panjin in the northern province of Liaoning exported 40,000t of gasoil from Yingkou port to the Philippines in December. Huajin, a unit of state-controlled Norinco, did not export any gasoil this month but is planning to export 80,000t in February.

Huajin was granted a 150,000t oil product export quota in the first batch of quota awards for 2021. Its 120,000 b/d Panjin refinery, which is operating at capacity this month, is capable of producing over 60,000 b/d of diesel but no gasoline, as it instead uses naphtha for ethylene production.

Chinese refiners are increasingly competing for a share of the diesel export market, with state-controlled PetroChina increasingly shipping cargoes in larger vessels from its refineries in northeast China such its Jinzhou and Jinxi. Shipments are also heading further afield to South American countries like Chile as southeast Asian supply builds up.

SEA7 MARKET ASSESSMENT

2021-01-21

INDICATIVE RATES ONLY AND FOR NATURAL DATES AND NOT FOR PROMPT LOADING