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China's exports of kerosene and diesel surged in May versus year-earlier levels, customs data showed on Tuesday, on strong jet fuel output, international flight demand and high diesel inventories.
Jet fuel exports in May stood at 1.59 million tonnes, General Administration of Customs data showed on Tuesday. That was up 68.1 per cent from a year ago and steady with April's exports, which were nearly double the year-earlier level.
"Strong middle distillate exports followed the strong production, particularly as oil majors ran hard for jet fuel to meet the Labour Day holiday demand," said Emma Li, Vortexa's senior China oil analyst.
Middle distillates include kerosene, jet fuel, and diesel fuel.
China's kerosene output rose 32.7 per cent year-on-year in January-April, the most recent data available.
International flights roughly doubled to 58,878 in May from a year earlier, although they remained 28.74 per cent lower than in May 2019, according to civil aviation data provider Variflight.
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Fuel provided to international flights is counted as an export in customs statistics.
Higher middle distillate output "came at the expense of light distillate production, when overall crude throughputs were largely capped by seasonal refinery maintenance - so gasoline exports were down year-on-year," Li of Vortexa said.
China's oil refinery output slipped 1.8 per cent from a year ago in May.
Gasoline exports stood at 860,000 million metric tonnes last month, down 36.6 per cent from a year earlier.
However, that was still more than twice the level of April's 400,000 million metric tonnes, the lowest since July 2015, as the recovering economy led to higher domestic fuel use.
Additionally, gasoline refining margins across Asia slumped, contributing to the weakness, as the summer driving season proved weaker than expected.
Exports of diesel, which accounts for the biggest share of refinery output, rose 79 per cent in May to 1.07 million metric tonnes, the data showed, driven by high inventories and decent refining margins.
"Despite almost three months of destocking, the inventories remained higher than the same period in the past two years," said Muyu Xu, an analyst with Kpler, adding that diesel refining margins remained relatively weak but outperformed gasoline.
The data on Tuesday also showed China imported 6.57 million tonnes of liquefied natural gas (LNG) in May, up 3.4 per cent from the previous year. From January to May, LNG imports rose 18.1%.
For the full year, China's LNG imports are expected to grow by 12%, UBS analysts forecast, boosted by an increase in consumption in the industrial sector as well as transportation, where LNG is increasingly used in trucks.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
