(Bloomberg) -- Diesel exports from China hit the lowest since June 2023 as refiners grappled with a limited shipment quota and near break-even margins.
Cargoes dropped to 350,000 tons last month, according to customs data on Friday. That’s less than half the level in August, and 71% below September last year. Gasoline exports were 730,000 tons, the least since April.
Refiners in Asia’s swing exporter of petroleum products have been hurt by a slowdown in nationwide growth, as well as the gradual decarbonization of the country’s transport fleet. Apparent oil demand fell by 7% in September, according to data on Friday, underscoring the industry’s challenges.
In this environment, refiners have been reducing runs, paring diesel production, while they have about 9 million tons of export quota left for rest of year out of 41 million, according to energy consultant JLC. Beijing gave out a lower-than-expected shipment quota last month.
The margin on diesel exports from ports in south China was just 46 yuan ($6.50) a ton in September, compared with a 82 yuan in August, according to data from Mysteel OilChem. Across the region, profits from producing diesel from crude — shown via so-called crack spreads — fell to $12 a barrel at end of September, compared with $32 a barrel last year.
Chinese refineries are expected to reduce diesel exports by more than 30% this month compared with September’s pace, according to OilChem.
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