China's gasoline, gasoil exports trend lower in August: Platts survey

China's gasoline and gasoil exports in August were expected to be lower than in July amid better margins in the domestic market and tight quota availability.

S&P Global Platts' survey of 13 key exporting refineries showed that they planned to export 722,000 mt of gasoline in August, 34,000 mt below their export plan for July. They planned to export 1.184 million mt of gasoil, down 70,000 mt from their July plans.

Platts has been surveying these 13 refineries since March. Their exports accounted for about 72% of China's gasoline exports and 66% of gasoil exports over March-July as reported by the General Administration of Customs.

China's gasoline and gasoil exports in July hit a five-month low of 890,000 mt and 1.54 million mt, respectively, GAC data showed.

"Tight export quota [availability] is limiting their ability to raise exports," a Beijing-based analyst said.

The country's product exports were stronger earlier in the year.

Over the first seven months of 2018, Chinese refiners exported 8.31 million mt of gasoline and 11.67 million mt of gasoil, up 42.5% and 25.1% year on year, respectively, according to GAC data.

As a result, they are left with only 3.82 million mt of quota allocation for gasoline and 5.51 million mt for gasoil for the rest of the year.

Beijing tightly controls oil product exports via quotas issued to state-owned companies.

CNOOC has the tightest availability among all quota holders. If it abides by its export plans, the company would have only 260,000 mt of gasoline quota and 60,000 mt of gasoil quota left for September-December. CNOOC usually exports 110,000 mt/month of gasoline and 190,000 mt/month of gasoil.

Moreover, relatively higher prices in the domestic market and the fact they will incur losses from overseas sales were discouraging companies from exporting.

China's domestic product prices have been climbing as demand recovers heading into the peak consumption season in September-October, while supplies have lagged due to maintenance shutdowns at several independent refiners over July-August. A combined capacity of around 43.7 million mt/year (877,591 b/d) at 13 independent refineries was offline in July, while about 17.74 million mt/year capacity was shut in August.

Wholesale 10 ppm gasoil was offered at Yuan 7,500/mt ($147.78/b) on Wednesday in Guangzhou, the capital of southern Guangdong province, according to local product traders.

This equates to an ex-tax price of $99.28/b, higher than the price in the Asian trading hub of Singapore. Platts' FOB Singapore 10 ppm gasoil assessment stood at $92.45/b on Thursday.

92 RON gasoline with 10 ppm sulfur content was offered at Yuan 8,500/mt ($146.33/b) in Guangzhou. This equates to an ex-tax price of $89.82/b, higher than Platts' FOB Singapore 92 RON gasoline assessment Thursday at $85.57/b.