CHINA DATA: Clean product exports seen sharply lower in March after surging 171% on year in Jan-Feb

China's clean oil product exports are expected to fall sharply in March as maintenance season ramps up, despite surging 171.2% year on year in January-February, market sources and analysts said March 20.

The country's exports of gasoline, gasoil and jet fuel surged to 9.56 million mt (1.27 million b/d) in the first two months of 2023 from 3.53 million mt in the same period of 2022, General Administration of Customs data released March 18 showed.

The jump came after Beijing encouraged exports to boost the economy by lifting export quota availability at the start of January by 68.2% to 21.86 million mt from the same period of 2022.

However, despite the year-on-year surge, the export volume was down from a 32-month high of 1.63 million b/d in December, posting a 21.5% month-on-month decline in January to 1.28 million b/d and a further 2.1% decline in February to 1.25 million b/d, as domestic demand recovered after the lifting of COVID-19 restrictions.

GAC releases data in metric tons which S&P Global converts to barrels using an 8.5 conversion factor for gasoline, 7.45 for gasoil and 7.9 for jet fuel.

With refinery maintenance season getting underway, market sources expect clean product exports to fall to as low as 1.5 million mt (385,000 b/d) in March as gasoline barrels are held back to supply the domestic market.

PetroChina, the country's leading gasoline exporter, is set to skip gasoline and gasoil outflows from its export-oriented refineries in March, refining sources told S&P Global Commodity Insights.

Gasoil leads exports

Gasoil exports rocketed 1,005.4% year on year to 573,000 b/d in January-February from 52,000 b/d and were the main contributor to total clean product exports, GAC data showed.

However, the gasoil outflow was down 14.5% from 671,000 b/d in December, posting the smallest month-on-month decline of the three products.

China's demand for gasoil seasonally declines around the Lunar New Year holidays as industrial and construction activity slows down.

The country's gasoil production fell 7.9% from December to 4.28 million b/d in the two months, National Bureau of Statistics data showed, slightly offsetting inventory pressure.

The reduction in gasoline and jet fuel exports amid increases in domestic production reflect the strong domestic demand rebound for transportation fuels for travel during the holiday as the country reopened after tight COVID-19-related controls, GAC and NBS data showed.

Gasoline exports fell 37.6% from December to 327,000 b/d in the first two months, while output rose 13% to 3.57 million b/d over the same period.

Jet fuel exports fell 16% from December to 368,000 b/d in January-February, while output surged 36.4% to 930,000 b/d.

Previously, market sources and analysts had expected China's clean product exports to be lower at 4 million mt (1.03 million b/d) in January and 3.9 million mt in February.

China's clean oil product exports

(Unit: million mt)

Source: General Administration of Customs

Notes: * adjusted according to % change provided by GAC