China maintains stable refined fuel exports under relaxed controls, sources say

• September exports of approximately 4 million tons represent a 33% increase from 2023's monthly average of 3 million tons, with diesel and jet fuel comprising the bulk of shipments
• Chinese diesel export margins are estimated at more than 1,500 yuan ($223) per ton, while Asia's diesel refining margins have tripled to around $70 per barrel since February
• Increased Chinese exports are expected to boost Asian fuel supplies and help cap regional price gains amid tight global markets following Russian refinery disruptions and reduced Middle Eastern exports

China Maintains Stable Refined Fuel Exports Under Relaxed Controls

Key Developments:

China is expected to maintain steady refined fuel exports at approximately 4 million metric tons in September, matching August levels as Beijing continues easing export controls implemented in March. This represents a significant increase from the 3 million ton monthly average in the previous year.

Export Breakdown:

• Jet fuel: largest component of exports
• Diesel: 1.1-1.2 million tons
• Gasoline: 600,000-800,000 tons
• Figures include fuel for international flights and Hong Kong exports

Major Companies:

State-owned refiners PetroChina and Sinopec received over 60% of export allowances, while Zhejiang Petrochemical Corp obtained approximately 500,000+ tons in allowances.

Market Context:

Beijing initially tightened export controls in March to protect domestic supplies after regional conflicts disrupted Middle Eastern crude imports. Current tight global fuel markets are driven by Russia transitioning from exporter to importer following Ukrainian drone attacks on refineries, and reduced Middle Eastern fuel exports.

Profit Margins:

Chinese diesel export margins exceed 1,500 yuan ($223) per ton, with Asian diesel refining margins around $70 per barrel—more than triple February levels before the Iran conflict began. Chinese refiners are capitalizing on these elevated overseas margins.

Market Implications:

Increased Chinese refined product exports are expected to boost Asian supplies, potentially capping regional price gains. Industry observers anticipate Beijing will issue a third batch of export quota allowances within the next month, consistent with recent years' timing patterns.

Official August trade data is scheduled for release later in September.