*
Refined products quota set at 9 million tonnes
*
Marine fuel allotment at 3 million tonnes
(Adds context, analyst commentary, requests for comment from
ministry and companies)
BEIJING, May 11 (Reuters) - China has decreased its
second batch of export quota volumes for refined oil products,
consultancies and trader sources said on Thursday, focusing on
local demand during the refinery overhaul season and boosting
domestic sales amid poor export margins.
The export volumes, comprising 9 million tonnes of refined products and 3 million tonnes of marine fuel, were allotted primarily to state-owned refiners, according to two refining sources and consultancies Longzhong and JLC. China Petrochemical Corp (Sinopec) , China National Petroleum Corp , China National Offshore Oil Company and Sinochem Group were the main recipients of these quotas, taking around 92% of the total allocation.
Reuters has asked the four companies for comment.
In addition, private refiner Zhejiang Petrochemical Corp, a refinery subsidiary of state defence conglomerate Norinco and China National Aviation Fuel Company were assigned 1.01 million tonnes. China's Ministry of Commerce did not immediately respond to a faxed request for comment.
The quota was less than the first batch of 18.99 million tonnes in early January but double the allocation of 4.5 million tonnes issued around a year earlier, Reuters records show.
The smaller export quota comes as refiners stockpile products amid strong demand expectations for gasoline and diesel in the peak summer season. China's gasoline and diesel export volumes have fallen for three consecutive months as refiners kept more cargoes for the domestic market where they are earning better profit margins, despite overall slow domestic demand growth.
While refiners have been unwilling to export because of the stronger local margins, the year-on-year increase in quotas mean that they can still choose to export should domestic demand turn weak at some point in time.
Longzhong estimated refiners could lose about 482 yuan ($69.73) a tonne on gasoline exports and 734 yuan a tonne on diesel exports in the current market. "This year, quota holders have greater flexibility to prepare export plans and capture arbitrage opportunities," said Energy Aspects analyst Sun Jianan. The 3 million tonnes of low-sulphur fuel export quotas in this second batch was down from 8 million tonnes in the first batch for this year.
However a trader from a state-owned Chinese oil company said
the previous batch of low-sulphur fuel quotas had yet to be used
up as marine bunkering demand was weak in the first quarter.
($1 = 6.9121 Chinese yuan renminbi)
(Reporting by Andrew Hayley in Beijing and Muyu Xu, Trixie Yap
and Jeslyn Lerh in Singapore; Editing by Jacqueline Wong and
Sonali Paul)
