Analysts at Energy Aspects predict significantly lower Chinese diesel exports in November due to reduced domestic inventories, amid the ongoing global diesel crisis. The revised forecast of 580,000 tons marks a sharp decline from earlier projections, according to Bloomberg. However, the firm notes that upward revisions could occur if refiners increase shipments as domestic demand wanes mid-November. Weak export margins for diesel in recent weeks may also pressure Chinese refiners' export plans this month.
Traders and executives indicate that diesel exports are expected to drop in November compared to the peak levels seen in August and September. This decline follows increased fuel shipments at the end of the summer, which reduced domestic inventories. While refiners have not finalized loading plans for the second half of November, early estimates suggest diesel shipments could reach around 800,000 tons, down from 1.33 million tons in August and 1.8 million tons in September.
Despite commercial refined product inventories hitting a seven-year low, GL Consulting suggests China is unlikely to halt diesel exports nationwide in November. The think tank notes that even with some cancellations or rescheduling of shipments, improved crude feedstock availability and operational flexibility could help ease supply constraints. This may actually lead to an increase in China's total refined product exports in November compared to October, according to analysts.
The revised export forecast highlights the challenges Chinese refiners face in balancing domestic demand with global market conditions. As the diesel crisis continues, the interplay between inventory levels, export margins, and refinery operations will remain critical factors influencing China's export strategy. The market will be closely watching how these dynamics unfold in the coming weeks.