(Repeats earlier story for wider readership with no change to
text)
* State refiners to export 1.5 mln T mogas in July, Aug -
traders
* PetroChina leads the overseas sales with most exports
quotas
* Overhang forces mixed aromatics producers in Shandong to
shut
* Top refiner cuts diesel/gasoline output ratio to record
lows
By Chen Aizhu
SINGAPORE, July 25 (Reuters) - China will ramp up gasoline
exports in July and August to near record levels with cargoes
moving to Mexico and Nigeria as refiners seek outlets for their
fuel amid a wave of new production and slowing domestic demand.
The surge in Chinese shipments will fill a supply gap caused
by refinery outages in the United States and the Middle East but
are likely to accelerate a plunge in Asian gasoline margins,
which have dropped 50% since July 12, when they clawed back to a
three-month high. China's refineries, led by PetroChina Co, the country's
second-largest, will export about 1.5 million tonnes of gasoline
a month in July and August, said two senior traders with
knowledge of China's gasoline exports. That is up from June
exports of 1 million tonnes and near the record of 1.69 million
tonnes exported in March, according to Chinese customs data.
The export surge is a result of the start up of two
large-scale refineries owned by Hengli Petrochemical and
Zhejiang Petrochemical that will each add about 4 million tonnes
per year of new gasoline output when fully operational.
The surge will reverse the trend of falling gasoline exports
in 2019, for the first half of 2019 they are down 9% from the
same period a year ago.
"Gasoline was overflowing (in China) as Hengli shocked the
market...companies took the advantage of stronger demand in
Latin America and West Africa," said one of the traders.
PetroChina was granted gasoline export quotas of 4.7 million
tonnes in the second batch of quotas issued in May, more than
half of the quotas given. As a result, the company is placing
cargoes to Mexico, Chile and Nigeria, according to the traders.
"Gasoline surplus in China is exacerbated by slowing demand
growth, given weakening consumer confidence as the trade war
continues, reflected also in slumping car sales," said Michal
Meidan, director of the China energy programme at Oxford
Institute of Energy Studies.
Chinese refiners have loaded 1.2 million tonnes of gasoline
for export as of July 23, after a record 1.6 million tonnes in
June, according to data from Refinitiv.
One PetroChina-run plant, West Pacific Petrochemical Corp,
sold 900,000 barrels of gasoline to Mexico in July, in three
different shipments. AUTO SALES
China's refiners have tried to lower the so-called
diesel/gasoline production ratio to produce less diesel and more
of the motor fuel, causing the excess of gasoline, said Wang
Yanting and Shi Linlin, analysts at Shandong-based consultancy
JLC.
The shift in production was aimed initially at easing the
overhang of diesel as demand for the industrial and truck fuel
has fallen amid a slowing economy.
Top refiner Sinopec, for example, squashed that ratio to a
historic low to 1.01 in the first quarter this year, versus 1.33
in the same period in 2015, according to company reports.
As a result, China's gasoline output in the first half of
2019 rose 2.9% from a year earlier while diesel dropped 7.8%,
according to the National Bureau of Statistics.
Gasoline demand growth is also sliding as Chinese automobile
sales, consisting mainly of petrol-consuming passenger vehicles,
fell for a 12th month in June, with 2019 annual sales set to
fall for the second year in a row. Seng-Yick Tee, senior director at consultancy SIA Energy,
forecasts China's gasoline demand to rise 5.4% this year, the
slowest pace since 2015, as the falling auto sales reduce
consumption.
As a result of the petrol glut, plants that make mixed
aromatics, petrochemicals used to raise the octane rating in
gasoline, in eastern China's Shandong province have closed.
Shandong-based consultancy JLC estimates about 30 plants
with annual output of 5 million tonnes have shut for months this
year as demand for mixed aromatics has declined.
"Our plant was losing money in a big way...We wish we had
shut down earlier," said a mixed aromatics plant manager in the
city of Zibo, Shandong, which has closed its 8,000 barrels per
day facility since March.
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China has been cutting diesel output, raising gasoline https://tmsnrt.rs/2M80e83
China's auto sales in 12 mths decline https://tmsnrt.rs/2MlLS4b
China's gasoline/diesel price gap narrows as petrol surplus
grows https://tmsnrt.rs/2MbA4kQ
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