Saturday, July 23, 2011

China's net diesel imports may not reflect real demand


http://af.reuters.com/article/commoditiesNews/idAFL3E7IL1O920110721

BEIJING, July 21 (Reuters) - China's diesel exports fell 26 percent in June from a year earlier, while diesel imports jumped more than 300 percent, customs data showed on Thursday.

However, the net diesel imports of 135,134 tonnes last month may not reflect real demand in the world's second largest oil market, as the data included double-counting of diesel shipped into bonded-zone storages by western trading houses such as Gunvor and did not enter the domestic market, traders said.

"I don't think there is much diesel actually imported into China. Those imports and exports from coastal ports are mostly likely from bonded zones," said a Beijing-based oil trader.

China has halted diesel exports since May to conserve domestic oil product supply ahead of a looming summer power crunch, but kept up exports to Hong Kong and Macau.

Gasoline exports also fell 20 percent from a year earlier to 321,613 tonnes in June, data from the General Administration of Customs showed.

Most of the gasoline exports were by top oil producer PetroChina as rival top oil refiner Sinopec has stopped oil product exports since April.

Gasoline exports may keep falling in July after PetroChina's Dalian refinery shut down a 200,000 barrel-per-day crude distillation unit after a fire over the weekend, traders said.

This week, the National Development and Reform Commission (NDRC) said China's refined oil product stocks at the end of June increased nearly 1 million tonnes from a year earlier and were at a normal level.

Fuel consumption averaged 665,000 tonnes a day in the second quarter, off a record daily rate of 701,000 tonnes in March.

Fuel oil imports fell 6.3 percent on the year to 2.22 million tonnes in June as most teapot refiners remained shut or running at low rates to minimize losses caused by soaring crude costs and government-capped fuel prices, traders said.

China OGP, a newsletter run by the official Xinhua News Agency, said China's commercial crude oil stocks at the end of June increased 3.2 percent from a month earlier, reversing a 3.5 percent drop in May.

Inventories of refined oil products at the end of last month fell 3 percent from a month ago, after rising 2.6 percent in May, the OGP reported.

For details of China oil product trade summary

(Reporting by Judy Hua, Jim Bai and Ken Wills Editing by Clarence Fernandez)

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