A few days ago, the planned export volume of refined oil products from state-owned enterprises has been flowing out one after another. Overall, the total export volume in April was 5.29 million tons, down 0.6 percentage points year-on-year. Among them, due to the impact of the COVID-19 epidemic, domestic gasoline demand has shrunk more significantly, so exports have been stronger; thanks to the stimulus policies successively introduced by the country, diesel demand is expected to improve, and exports have declined year-on-year; the global epidemic outbreak , leading to a sharp drop in international flights and a significant decline in refueling volume in the bonded area, so the export volume of jet fuel has also declined. A few days ago, the planned export volume of refined oil products from state-owned enterprises has been flowing out one after another. Overall, the total export volume in April was 5.29 million tons, down 0.6 percentage points year-on-year. Among them, due to the impact of the COVID-19 epidemic, domestic gasoline demand has shrunk more significantly, so exports have been stronger; thanks to the stimulus policies successively introduced by the country, diesel demand is expected to improve, and exports have declined year-on-year; the global epidemic outbreak , leading to a sharp drop in international flights and a significant decline in refueling volume in the bonded area, so the export volume of jet fuel has also declined.
Data source: Jin Lianchuang
Since 2020, affected by emergencies, the start of construction has been delayed across the country Due to the resumption of work and restrictions on people’s travel, the market has been in a “long holiday” state. Terminal demand for refined oil has dropped sharply, and market trading has been unusually light. Entering March, what is the current supply and demand situation in the domestic refined oil market? The current analysis is as follows:
Supply side: On the main business side, in order to speed up the consumption of high-priced crude oil in the early stage, although some refineries have carried out capacity-increasing operations, due to some refineries entering planned maintenance, the overall operating rate of the main refineries is still at Relatively low below 70%. According to statistics from Jin Lianchuang, the crude oil processing volume of main domestic refineries fell by 17.25% year-on-year in March, and refined oil production is conservatively estimated to decrease by about 5 million tons month-on-month. In addition, thanks to the sharp drop in the landed cost of imported crude oil for local refining, the theoretical refining profits have improved rapidly, which has continued to boost the enthusiasm of local refining for resumption of work. With the resumption of early maintenance and refinery operations, the operating rate of local refining will get rid of the low value and return to 55 %, the decline narrowed to 6.5% compared with the same period last year. Based on the total production capacity of local refineries of approximately 322 million tons per year, this month is equivalent to a loss of approximately 1.3 million tons of gasoline and diesel production.
Demand side: With the easing of the COVID-19 epidemic, the domestic resumption of work and production has been steadily advancing. The current domestic comprehensive resumption rate has reached more than 70%, and the resumption rate of the construction industry in 15 provinces has exceeded 50%. But at the same time, what cannot be ignored is that the spread of the international epidemic has also brought great uncertainty to my country’s resumption of work and production. Intuitive data shows that the sales volume of most gas stations in various regions has increased to more than 60% of the normal level. We tentatively predict that the demand for refined oil this month may be 70% of previous years. Referring to the apparent consumption of refined oil in the same month of previous years, which was about 24 million tons, domestic apparent consumption may fall by about 7 million tons year-on-year.
The contradiction between domestic supply and demand is severe, and the export of refined oil products is still an important means to alleviate domestic supply pressure. However, with the outbreak of the epidemic abroad, the demand for refined oil products has declined globally, and the export link has encountered obstacles. In addition, as international oil prices fell below US$40/barrel, triggering the “floor price” in the domestic refined oil pricing mechanism, which means that retail prices will no longer be adjusted during low oil prices, supporting domestic oil prices to a certain extent. Therefore, some state-owned Companies tend to sell gasoline and diesel to the domestic market. Furthermore, the current low export profits will also affect the export of refined oil products, so the actual export volume in April does not rule out the possibility of readjustment.
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