Gasoil exports from China's state-owned trading company Unipec -- which accounted for most of the country's gasoil shipments so far this year -- are expected to be minimal in June and July following reduced volumes in May, because the company is still waiting for its export quota to be renewed, sources said Friday.
"July export volumes [from Unipec] are zero," a source familiar with the matter said, adding that June volumes were also likely to be negligible.
"August gasoil export volumes are unclear," he added.
So far this year, China's unusually high level of gasoil exports has been spearheaded by Unipec, the trading arm of state-owned Sinopec Corp. Rival Chinaoil is the only other Chinese company that exports gasoil.
According to latest customs data, China exported 1.39 million mt of gasoil from January to April this year, more than four times the volume during the same period in 2012. Unipec is estimated to have accounted for over 1 million mt of the exports over January-April, with Chinaoil accounting for the rest, Platts reported previously citing company sources. Chinaoil has not exported any gasoil for May or June, a company source told Platts earlier.
"I do not think they [the Chinese] will export much gasoil in July. Therefore June and July exports are at a minimum," said a gasoil trader. "We will have to wait and see for August, if the Chinese refiners have the quota to export gasoil."
Traders had said earlier that China's gasoil exports in May would likely fall significantly compared with the first quarter of this year as Unipec had exhausted its export quota.
Oil export quota volumes are decided by China's Ministry of Commerce and National Development and Reform Commission, based on domestic demand and supply, and import and export trends. They are believed to be issued quarterly and companies which have depleted their quotas have to apply for new ones in order to continue exporting surplus barrels.
China's gasoil exports have risen significantly since late 2012 because of slowing domestic demand and higher domestic production from expanded refining capacity. The bulk of the Chinese gasoil exports comprise 0.25% sulfur gasoil.
