Domestic gasoil market has been sluggish in the first half of July, and both wholesale trading and retail sales have declined moderately on weak end-user demand, C1 found.
In the retail market, peak consumption from northern China's agriculture is over, and demand from southern China’s transportation, infrastructure construction and industries etc has shrunk because of continuous rain. Meanwhile, demand from fishing was weak in southern and eastern China etc due to official suspension of fishing.
Furthermore, more rigid crackdown on overloading has dampened demand from trucks.
In the wholesale market, demand has also been lackluster and pushed down prices. The average price of zero-pour-point gasoil averaged Yuan 8,313/mt on Jul 15, down by Yuan 46/mt from Jul 1, C1's assessment indicated. Prices fell on sluggish trading in most regions.
"Most market players hold strong wait-and-see sentiment as the trend in the international crude market is not clear, and few traders are willing to buy gasoil now," said a source with Shandong-based Haihua Group, a subsidiary of CNOOC.
Gasoil market is likely to remain weak in the rest of the month, since demand is traditionally slack. In addition, PetroChina has revealed that it may import gasoil if domestic supply becomes tight.
