China's Zhejiang Petroleum Boosting Diesel Supply

China’s largest private refiner, Zhejiang Petroleum and Chemical Co is ramping up diesel output and reducing pet chem production this month according to Reuters sources.

• It is amongst the refiners granted new boosted export quotas by Beijing.
• The refiner will increase diesel output by around 200,000 tonnes (1.5 million barrels) for November from its 800,000 barrels-per-day Zhoushan refinery.
• It is cutting production of aromatics such as benzene and paraxylene to free up material for more profitable fuel production.
• Asia's 10-ppm sulphur gasoil margins are over 190% higher than a year ago but have cooled on higher production recently because of the export quota boost.
• China set its latest batch of oil products export quotas for 2022 at about 15 million tonnes – the years single largest batch – a change in policy to boost its sagging export market.
• The size of the quotas and the turn in policy came as a surprise to many in the market.