UPDATE 1-China grants refiners additional fuel export quota of over 14 mln T

(Adds comments, details)
    SINGAPORE/BEIJING, April 6 China has granted an
export quota of more than 14 million tonnes of fuel to refiners,
down from nearly 21 million tonnes in the first batch of the
year but including naphtha despite a domestic shortage, a trade
source familiar with the matter said. 
    Gasoil makes up the bulk, or 39 percent, of the total
volumes approved in the second round at 5.71 million tonnes,
followed by gasoline at 5.58 million tonnes. 
    All six independent Chinese refiners were given approval to
export mostly gasoline as it is one of the better-performing oil
products since last year in terms of margins. 
    "Gasoline export margins are better, thanks to healthy car
sales in the region," said a trader with knowledge of the quotas
arrangement, adding that the diesel market is not doing well.
    Although gasoline cracks are doing better than most other
oil products, Asia is struggling with high stockpiles and fuel
is being held on tankers, a rare situation. 
    China had bombarded Asia with nearly 880,000 tonnes of
gasoline in December 2015, the highest level in six years and
more than 90 percent higher than the monthly average for January
to November at 456,000 tonnes.
    Beijing typically grants quotas four times each year. The 21
million tonne quota granted in January 2016 was higher than any
of the four rounds in 2015 as China was grappling with excess
supply due to the slowdown in the Chinese economy.
    Four independent refiners, known as teapots, have also been
granted export quotas this year for the first time. 
    Although gasoline exports from China fell in February to
about 601,000 tonnes, they were still considered high especially
when Europe has also been exporting gasoline to Singapore. 
    CNOOC was not involved in the second batch of export quotas
as the first quotas of 1.6 million tonnes of fuel, comprising
gasoline, gasoil and jet fuel/kerosene, was sufficient, the
trade source said. 
    The government also granted rare naphtha quotas to two
plants operated by Sinochem Corp, totalling 90,000 tonnes, a
move which traders said was due to current attractive naphtha
crack margins rather than the start of a long-term trend, as the
country is net short of the product. 
    China is shipping out record amounts of refined fuel as
small, independent refineries have emerged since late last year
to join state oil majors as purchasers and refiners of crude.
     TABLE 1: China's Oil Product Export Quotas in 2016 from
state-owned refiners (in '000 tonnes)
 2016 (2nd round)    Gasoil   Kerosene   Gasoline     Naphtha
 Sinopec              4,050      4,650      1,300         nil
 PetroChina           1,140        650      1,210         nil
 Sinochem Quanzhou      400         50        600          50
 Sinochem Hongrun        50        nil        100          40
 Total                5,640      5,350      3,210          90
TABLE 2: China's Oil Product Export Quotas in 2016 from
independent refiners (in '000 tonnes)
 2016 (2nd Batch)               Gasoil     Kerosene  Gasoline  Naphtha
 Shandong Dongming                  nil         nil        90      nil
 Huifeng Petrochemical              nil         nil        10      nil
 Shouguang Luqing                   nil         nil        50      nil
 Tianhong Chemical                  nil         nil        30      nil
 Chambroad Petrochemicals           nil         nil        20      nil
 Baota Petrochemical                 70         nil        30      nil
 Total                               70         nil       230      nil

 (Reporting by Seng Li Peng, Florence Tan and Chen Aizhu in
Beijing; Editing by Susan Fenton)

The article UPDATE 1-China grants refiners additional fuel export quota of over 14 mln T was originally published at Reuters - US Energy.