Audio By Carbonatix
State-run oil company Sinopec is selling diesel as far afield as South Africa as China’s refiners seek homes for their surplus fuel in the latest sign of troubles in the domestic refining business.
Sinopec said on Monday it shipped its first 30,000 tonnes of diesel from its Shanghai refinery heading for South Africa.
This cargo and another September shipment marked the first batch to South Africa in two years, according to Thomson Reuters Eikon shipping data. Such shipments have also been extremely rare in the past five years, according to the data.
“China’s four oil majors are facing a glut overhang in domestic market and the companies are fully aware of the headwinds ahead,” a product trader from a state-owned oil company said.
“Chinese companies are looking to expand sales to emerging market countries beyond South East Asia where margins have weakened amid competition,” he said referring to India and South American countries.
He declined to be named to due company policy.
Sinopec’s rival CNPC also sold its first ever gasoline to Americas in April.
China exported record volumes of diesel in May, with the total almost hitting 2.4 million tonnes. Shipments have remained firm since, as domestic fuel demand growth stagnates.
Vehicle sales, a barometer of gasoline demand, were down 4 percent in July. An environmental crackdown has also hurt diesel sales from trucks in the past two years.
“Refinery runs were growing fast but domestic consumption did not catch up. With two more new refineries expected to start soon, the glut is only going to get worse,” Liu Mengkai, fuel products analysts with consultancy Sublime China said.
“Chinese refiners are vying for a bigger share of fuel market in countries like Australia where consumption is still good,” Liu said.
Eikon trade data showed that China’s total fuel exports to Australia hit 11 cargoes or 344,800 tonnes in July, a record high.
In Africa, Sinopec is seeking to buy Chevron’s assets in South Africa and Botswana, giving Asia’s top refiner its first major African refinery as well as petrol stations and convenience stores.
China’s refinery runs rose in June as state-controlled oil majors boosted output of fuel products, data showed.
Latest Stories
-
Is talk of “losses” by GoldBod just abstract drivel? Bright Simons asks
1 hour -
US Strikes: Ondo Amotekun arrests 39 fleeing suspected terrorists
1 hour -
New Passport Office opens in Techiman, bringing vital services closer to Bono East residents
2 hours -
Anthony Hopkins shares advice as he celebrates 50 years of sobriety
2 hours -
KTU Radio wins international award for its unique programme on World College Radio Day
2 hours -
German court jails man for drugging, raping and filming wife for years
2 hours -
Ashanti police intercept 2,600 AK-47 rounds and tactical gear at Asankare Barrier
2 hours -
Alhaji Agongo builds lifeline facility for Ghana Police Hospital’s ‘Unknown Patients’
3 hours -
Removal of Chief Justice Torkonoo had economic implications – Samson Lardy Anyenini
3 hours -
Ronaldo will not retire until he scores 1,000 goals
3 hours -
Amerado shuts down Okese Park with third edition of My Motherland Concert in Ejisu
3 hours -
Mahama visits Kufuor at Peduase to extend Christmas and New Year wishes
3 hours -
Man City close to agreeing terms Bournemouth to sign Semenyo
3 hours -
Time is right to change Man Utd formation – Amorim
3 hours -
Akufo-Addo’s record not entirely negative despite economic challenges – Anyenini
3 hours
