LAUNCESTON, Australia, Sept 21 (Reuters) - Slumping diesel
exports from China are proving a boon to other refiners in Asia,
with the profit from producing the fuel rising to the highest in
China has been Asia's second-highest exporter of gasoil, the
building block for middle distillate fuels that include diesel,
heating oil and jet kerosene, but its shipments have slumped in
recent months amid lower refinery processing and a lack of
China's diesel exports dropped in August to the
lowest since May 2015, slumping to 540,000 tonnes, equivalent to
about 135,000 barrels per day (bpd), from 1.39 million tonnes in
July, according to official customs data released on Sept. 18.
Diesel exports have been on a downward trend since March
this year, when they were 2.81 million tonnes, or about 680,000
bpd. The total for the first eight months of the year is now
3.5% below the same period in 2020.
A recovery in China's diesel exports isn't on the cards for
September, with commodity consultants Kpler estimating shipments
of around 134,600 bpd, roughly in line with August's depressed
The absence of Chinese cargoes is boosting profits for other
export-focused refiners in Asia, with the crack, or profit
margin, for producing a barrel of gasoil from Dubai crude at a
Singapore refinery rising to an 18-month high of
$7.96 a barrel on Sept. 17.
The crack did slip back a tad to $7.92 on Monday, but it is
still more than double the 2021 low of $3.44 a barrel recorded
on Aug. 24. That's a rally of 130% in the past four weeks.
The move has helped drive overall profits for a typical
Singapore refinery using Dubai crude to more than
double the average for the past year.
The overall margin for refining a barrel of Dubai was $5.54
on Monday, up from an average of $3.19 for August and $2.04 for
the past 365 days.
While the profit for producing diesel is recovering, the
same cannot be said for gasoline, with the crack for making the
motor fuel from Brent crude at a Singapore refinery
<GL92-SIN-CRK> dropping to $6.87 a barrel on Monday, down from a
2021 peak of $9.92 on Aug. 5.
China's exports of gasoline have also been declining,
dropping to 570,000 tonnes, or about 156,000 bpd, in August,
from 740,000 tonnes in July and the lowest since February 2019.
Gasoline exports have been in a downward trend since
January, when they were 1.89 million tonnes, equivalent to about
It's not just China that is exporting less gasoline, with
shipments from India expected by Refinitiv Oil Research to drop
for a fourth straight month in September, while Singapore is
also forecast to export less in September than in August.
However, Asian gasoline demand has been more affected by the
ongoing coronavirus pandemic than has demand for diesel.
Gasoline is mainly used to power light vehicles, and
lockdowns mean fewer people are using cars.
Diesel is more used in industrial activities, such as
construction, heavy vehicle transportation and mining, sectors
that have been able to recover from the pandemic.
Asia's overall fuel demand has been lagging the recovery
seen in Europe and North America, given several major countries
remain in some form of lockdown.
As can be seen by the differing fortunes of diesel and
gasoline, the recovery is likely to be uneven and largely
dependent on how successful vaccination efforts are across the
(Editing by Richard Pullin)