19.02.2013, 00:04
China Gasoline Exports May Hit 5-Year Low in 2013
OREANDA-NEWS. February 19, 2013. Greater refining capacity in China, coupled with an upbeat economic outlook, will prompt the country to speed up gasoline production this year, but analysts do not expect an increase in exports, which hit a four-year low in 2012.
At best, Chinese exports may stay flat, although volumes are more likely to drop further, hurting importers, particularly Indonesia and Vietnam, the two largest in Asia. But ample supplies in Asia should cushion the impact.
"Some countries like Indonesia may look to China for gasoline imports, but flat exports from China will not affect the regional dynamics much as there is still plenty of gasoline around," said Kang Wu of consulting firm FGE.
China is the world's second largest gasoline consumer after the United States, and is likely to soak up a projected 2.2 million barrels per day (bpd) of the fuel this year, an increase of about 7 percent from last year, said Kang.
But its exports rank below India, Singapore and South Korea. In 2012, China exported close to 68,000 bpd of gasoline, official data show.
JBC Energy's David Wech expects China to slash its 2013 gasoline exports further to an average of just below 60,000 bpd.
"This is mainly due to the fact that we still expect healthy Chinese gasoline demand growth this year, albeit at a slower pace than in 2012," he said.
The China National Petroleum Corporation (CNPC), parent of PetroChina, projected that China will have a much smaller gasoline supply surplus this year, at 26,000 bpd, versus nearly 72,000 bpd in 2012.
China's vehicle fleet is still growing although growth has slowed to a single-digit rate in recent years.
The Chinese government's plans to levy from this month a hefty consumption tax on blending components in gasoline is also likely to raise petrol demand.
The government is discouraging the use of blendstocks as some of these components harm the environment.
LOWER EXPORTS WON'T LEAD TO DROUGHT
The possible lower exports from China will create only a marginally tighter to a balanced market as India should be able to fill the gap, analysts and traders said.
Depending on prices, Reliance Industries, operator of the world's largest refining complex in western India, is able to export to Asia or outside the East, including Africa.
Asia had a surplus of about 250,000 bpd of gasoline in 2012, IHS's Victor Shum estimated. While the gasoline supply will remain in excess, the 2013 surplus will be smaller than in 2012, squeezed by demand from importing countries, he added.
Countries such as Japan and Australia may increase reliance on gasoline imports as refining capacities fall, said Wech of JBC Energy. But this dependence can be counterbalanced by growing refining capacities elsewhere, especially in India.
At best, Chinese exports may stay flat, although volumes are more likely to drop further, hurting importers, particularly Indonesia and Vietnam, the two largest in Asia. But ample supplies in Asia should cushion the impact.
"Some countries like Indonesia may look to China for gasoline imports, but flat exports from China will not affect the regional dynamics much as there is still plenty of gasoline around," said Kang Wu of consulting firm FGE.
China is the world's second largest gasoline consumer after the United States, and is likely to soak up a projected 2.2 million barrels per day (bpd) of the fuel this year, an increase of about 7 percent from last year, said Kang.
But its exports rank below India, Singapore and South Korea. In 2012, China exported close to 68,000 bpd of gasoline, official data show.
JBC Energy's David Wech expects China to slash its 2013 gasoline exports further to an average of just below 60,000 bpd.
"This is mainly due to the fact that we still expect healthy Chinese gasoline demand growth this year, albeit at a slower pace than in 2012," he said.
The China National Petroleum Corporation (CNPC), parent of PetroChina, projected that China will have a much smaller gasoline supply surplus this year, at 26,000 bpd, versus nearly 72,000 bpd in 2012.
China's vehicle fleet is still growing although growth has slowed to a single-digit rate in recent years.
The Chinese government's plans to levy from this month a hefty consumption tax on blending components in gasoline is also likely to raise petrol demand.
The government is discouraging the use of blendstocks as some of these components harm the environment.
LOWER EXPORTS WON'T LEAD TO DROUGHT
The possible lower exports from China will create only a marginally tighter to a balanced market as India should be able to fill the gap, analysts and traders said.
Depending on prices, Reliance Industries, operator of the world's largest refining complex in western India, is able to export to Asia or outside the East, including Africa.
Asia had a surplus of about 250,000 bpd of gasoline in 2012, IHS's Victor Shum estimated. While the gasoline supply will remain in excess, the 2013 surplus will be smaller than in 2012, squeezed by demand from importing countries, he added.
Countries such as Japan and Australia may increase reliance on gasoline imports as refining capacities fall, said Wech of JBC Energy. But this dependence can be counterbalanced by growing refining capacities elsewhere, especially in India.
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