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2021-04-19 16:40:00

CHINA OIL PRODUCTS EXPORTS +31.7%

CHINA OIL PRODUCTS EXPORTS +31.7%

PLATTS - 16 Apr 2021 - China's oil product exports are expected to rise by 31.7% year on year to around 54.7 million mt in 2021, as the recovery in the jet fuel market and an improving macro-economic outlook worldwide post COVID-19 supports demand, a report from the Economics and Technology Research Institute, or ETRI, a part of China's state oil company China National Petroleum Corp., said on April 16.

The increase will be a welcome reprieve to the China's oil product export markets after the country's exports dropped sharply 17.4% on the year to 41.52 million mt in 2020, primarily due to slump in jet fuel demand.

Total exports of jet fuel almost halved by about 47% to 7.43 million mt in 2020, as commercial flights plummeted due to the imposition of lockdowns and other travel-related restrictions in various regions worldwide.

But with the ill-effects of the pandemic showing signs of waning in 2021 as the vaccination drive picks up globally, ETRI expects China's jet fuel exports to increase to around 12.7 million mt in 2021, up about 70.9% on year.

The exports of gasoil and gasoline will also likely register a rise by about 23.9% and 22.4% year on year in 2021 respectively, according to S&P Global Platts calculations based on data from ETRI.

The higher exports will be met from the surplus output in China, where new refining capacity will continue to come online in 2021, pushing more barrels overseas.

ETRI expects China's total refining capacity to rise to 900 million mt/year in 2021, with an increase of 4.5% on the year for crude throughputs.

As a result, the combined output of gasoil, gasoline and jet fuel, will grow 3.1% on the year to 439 million mt, in contrast to an expected consumption of 384 million mt in 2021, or up 1% on the year, according to ETRI.

Oil products demand capped

The total consumption of gasoil is expected to drop slightly by 0.8% on the year to 190 million mt in 2021, despite stronger infrastructure and logistics as gasoil gets increasingly replaced by cleaner fuels such as LNG. The number of LNG trucks, for example, are expected to increase by about 30% on the year to around 1 million units in 2021, replacing gasoil demand.

ETRI also expects China's gasoline demand to improve in 2021 with a marginal growth of 0.8% to around 157 million mt. This will be primarily driven by increased driving activity, reflected by the surge in sales of passenger vehicles, expected to grow by 7.5% on the year to 21.7 million.

Meanwhile, air travel -- domestic and international -- will receive an impetus as more people are vaccinated and undertake such journeys, ETRI said. In 2021, ETRI expects passenger turnover in China to recover to about 85% of the pre-pandemic levels.

As a result, total jet fuel consumption is expected to increase by 13% on the year to 37.5 million mt. But it will still be about 1.04 million mt, or 2.7%, lower from 2019 before the pandemic hit.

Ethylene capacity to hit record

On the petrochemical side, around 8.45 million mt/year of ethylene capacity will be commissioned in 2021 from 11 companies. This is the maximum so far in any single year.

This will bring the total ethylene capacity to 43.63 million mt/year, up by 24% on the year and at par with that of the US.

Compared with oil products, petrochemicals consumption was impacted to a lesser extent by the COVID-19 pandemic. Consumption in the petrochemicals sector grew 4.6% on the year in 2020, thanks to increasing demand for medical supplies.

The trend of reduced oil products output and increased supply of petrochemicals will continue in 2021, ETRI added.

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Tags: CHINA, OIL, EXPORTS