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Diesel Margins and Export Quotas Support China Fuel Exports in Oct


China fuel exports are expected to remain strong in October due to recent export quotas and firm profit margins driven by diesel. Strong margins for middle distillates in Asia have so far been enough to offset weakness in gasoline and naphtha but an increase in China diesel exports could add downside pressure to margins.

  • Increased Chinese refiner crude stocks from discounted Russian and Iranian crude imports could also help boost exports of products without having to import more oil according to Reuters.
  • China's diesel exports could increase from November onwards with additional fuel export quotas but would require a significant increase to match year ago levels.
  • October 2023 shipments are estimated between 1.2m to 1.3m metric tons according to LSEG and roughly in line with 1.14m in September and 1.26m in August. Diesel shipments were up at 2.1m metric tons in November 2022 and 2.79m in December 2022.
  • Diesel shipments from China so far in October are just 660k metric tons according to Kpler and likely to end the month in line with September.

Source: Reuters

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