China, India Q4 gasoil exports seen to surge 47% on year to 2
mil-2.5 mil mt
Singapore (Platts)--29Oct2012/206 am EDT/606 GMT
Asia's two largest economies, China and India, could see combined
gasoil exports surge 33-47% or 2 million-2.5 million mt year on year in
the fourth quarter, up from 1.5 million-1.7 million mt in Q4 2011, amid
a gloomy global economic outlook and increased refining capacity,
traders said.
Indian refiners are expected to produce surplus gasoil and the bulk of
regional exports in the quarter amid waning domestic demand and
increased production, traders said.
India's Mangalore Refinery and Petrochemicals Ltd., will export an
average 120,000 mt/month of high sulfur gasoil over October-December.
Late last week, the refiner issued its fourth tender to sell spot high
sulfur gasoil sell tender for loading in November, equating to 160,000
mt in that month alone.
In contrast, MRPL sold or offered a total 170,000 mt of high sulfur
gasoil for loading over October-December 2011, Platts data showed.
Privately owned Essar refinery has sold up to 170,0000 mt of spot 500
ppm sulfur gasoil for November. It has been increasing spot gasoil
exports since H2 September, after being absent from the spot gasoil
market since 2010, amid slowing domestic demand and a refinery expansion
earlier this year.
Private refiner Reliance is likely to export 1 million mt/month of
gasoil in Q4, or up to 1.5 million mt/month if domestic demand remains
sluggish, traders said.
"Reliance runs two large refineries and can easily export between
800,000 to 1.2 million mt/month of gasoil, but when domestic demand is
slower, that figure can go up to 1.3-1.5 million mt/month," a source
said.
Reliance and Essar stepped up their combined refined product exports in
August for the second month in a row, to around 4.45 million mt, or
about 1.13 million b/d, Platts reported earlier.
Gasoil forms the bulk of refined products exports from India.
Essar's refining capacity stands at 400,000 b/d, up from 360,000 b/d
before the latest expansion, while Reliance has a nameplate capacity of
1.24 million b/d at its Jamnagar complex. Jamnagar has two refineries,
including a 580,000 b/d plant in a Special Economic Zone that is fully
export-oriented.
CHINA Q4 EXPORTS TO HIT 300,000 MT/MONTH
China could see massive spike in gasoil exports in Q4 amid steady
refining run rates and slower demand in the county, traders said.
Surplus coal stocks could also minimize gasoil demand as a utility
feedstock.
Main traders Petrochina and Unipec could see their gasoil exports hit or
even surpass 300,000 mt/month in Q4, compared with 107,000 mt/month a
year earlier, traders said.
"What I'm hearing is that for Q4, China should be a regular exporter due
to high inventory volumes," a Singapore-based trader said.
China's refinery run rates have remained resilient amid a fall in
domestic demand in recent months, and capacity expansions expected in Q4
will boost overall refinery runs further. Barclays' Research expects
over 700,000 b/d of new refinery capacity to be added in the current
quarter.
"Domestic gasoil demand will be stronger because of higher seasonal
demand, but with the higher throughput in the fourth quarter, we'll
definitely see more gasoil exports, especially since economic growth has
not fully recovered," said a products marketer in Beijing.
The country's refinery throughput in September stood at 38.76 million
mt, up 2.7% from August and up 7% year on year. For the first nine
months of 2012, crude throughput stood at 340.28 million mt, up 2% year
on year.
China exported around 500,000 mt of gasoil in Q3, surging from 340,000
mt in Q2, amid weaker demand due to slower economic growth.
Domestic gasoil demand over June to August contracted by an average 1.8%
year on year, or 3.3 million b/d, Platts calculations showed.
--Jonathan Nonis,
jonathan_nonis@platts.com --Song Yen Ling,
yen_ling_song@platts.com --Edited by Wendy Wells,
wendy_wells@platts.com
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