China has issued fuel export quotas of 9 million tons for the final quarter of the year, Reuters has reported, citing two local commodity consultancies.
The bulk of the quotas comprise clean refined fuels, with the remainder of 1 million tons in bunkering fuel. Almost 6.4 million tons of the new quotas were issued to state-owned refiners including Sinopec, CNPC, and CNOOC.
This latest batch will bring the total fuel export quotas for the year to 54 million tons, the report said, which was virtually unchanged on 2023 quotas.
Chinese refiners have been struggling with falling margins lately, with run rans falling by 10% in August to 12.6 million barrels daily, as sector players capped production to preserve profits. In the meantime, they built inventories, at a rate of 3.2 million barrels daily, which would be the largest monthly increase in inventories since 2015, ING commodity analysts wrote in a recent note.
Meanwhile, gasoline exports from China slumped in August, by 44% on the year to770,000 barrels daily, as export margins slipped below zero. As of August, Chinese refiners had used up some 80% of their fuel export quotas. Apparent demand for oil during that month was estimated at 12.5 million, down by 15% on the year.
Pressured by lower margins and tepid demand on the domestic market, two independent refiners went out of business recently. Zhenghe Group Co and Shandong Huaxing Petrochemical Group Co were declared bankrupt after creditors failed to agree on restructuring plans for the refineries, local court statements showed on Tuesday, as carried by Bloomberg.
A third refinery operated by Sinochem in the Shandong province, home to China's independent refiners, is expected to begin meetings with creditors later this month. This is Shandong Changyi Petrochemical Co, per a separate local court statement cited by Bloomberg earlier this week.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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