Diesel exports will maintain growth momentum

According to customs data, in terms of exports, China’s diesel exports in February 2019 reached 1.511 million tons, down 18% from the previous month and up 45% year-on-year. In January-February, the cumulative export volume of diesel in China reached 3.384 million tons, up 44% year-on-year. In terms of imports, China's diesel imports in August were 83,500 tons, up 44% from the previous month and down 24% year-on-year. In January and February, the cumulative import of diesel was 233,000 tons.

From the data of January to February, China's diesel exports in 2019 still maintain a "big step" growth momentum. According to the analysis, in recent years, China's refining capacity has been expanding, and in 2019, it has officially ushered in the "Great Refining Age." Dalian Hengli Petrochemical's annual production capacity of 20 million tons was officially put into operation at the end of 2018. In January 2019, the first phase of Zhejiang Petrochemical's annual production capacity of 20 million tons was completed, and it is expected to produce refined oil in the second quarter. The two new projects are high-end refining models. In addition, in 2019, traditional local refineries also have expansion plans.

For the trend of rapid growth in diesel supply, downstream demand is difficult to match. Under the situation that the contradiction between supply and demand of diesel continues to deepen, on the one hand, refineries will relieve pressure by reducing the ratio of diesel to steam, and on the other hand continue to expand exports.

It is worth mentioning that according to Jin Lianchuang, the Ministry of Commerce has lowered the quota of gasoline export quotas in the first batch of export quotas for refined oil products in 2019, and the corresponding quantities have been converted into diesel and jet coal export quotas. In terms of adjustment direction, the export of diesel oil will be increased. It is expected that the export volume of diesel oil will maintain a substantial growth momentum in March.