Energy Aspects has cut its forecast for China's diesel exports in November by 580,000 tons, which is 400,000 tons lower than previous estimates. This reduction comes as domestic inventories have significantly decreased and the global diesel crisis continues.
Reasons for Export Decline
Analysts at Energy Aspects have stated that if domestic demand decreases in mid-November, we may see upward adjustments in the new diesel export forecasts. The decline in diesel export margins in recent weeks may also negatively impact Chinese refineries' exports. China's diesel exports in November will decrease compared to the peaks in August and September, as increased fuel transport at the end of summer has led to lower domestic inventories.
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New Forecasts and Market Situation
Refineries have not yet finalized loading contracts for the second half of November, but initial estimates suggest that diesel exports may reach around 800,000 tons this month, a significant decrease from 1.33 million tons in August and 1.8 million tons in September. Although commercial inventories of refined products have reached their lowest level in nearly seven years, it does not appear that China will completely halt diesel exports in November.
Analysts at GL Consulting, a think tank under the Mysteel group, have stated in a note that improvements in the availability of raw materials, flexibility in refinery operations, and limited domestic demand growth may help ease supply constraints and actually increase total refined product exports from China in November compared to October, even if some diesel shipments are canceled or rescheduled.
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