MOSCOW (MRC) -- China has issued a new and final batch of refined fuel export quotas for 2020 totaling 3 million tons, including its first sizeable quota to a giant private refiner, two industry officials with knowledge of the matter said, said Chemweek.
The new issue brings the total fuel export quota this year to nearly 59 million tons, up from last year's 56 million tons. Valid until the end of the year, the new quota includes 1.95 million tons allotted to CNPC, 1 million tons to privately controlled Zhejiang Petrochemical Corp (ZPC) and 50,000 tons to North Industries Group Corp (Norinco), the sources said.
The Ministry of Commerce did not immediately respond to a request for comment. Rongsheng Petrochemical Co, the largest stake holder in ZPC, confirmed in a statement that it had received the 1 million ton export quota.
ZPC, which operates China's single-largest crude oil refinery based in eastern port city Zhoushan, in July became the first private refiner allowed to export refined fuel, but the size of its quota had not been determined. Beijing is seeking to let more private companies access the global fuel market as it looks to ease oversupply pressure on China's domestic market.
"The export quotas will offer more flexible choices for the company in the fuel market ... and will allow the company to pursue bigger benefits," Rongsheng said in the statement. Previously, only a handful of large state-owned Chinese refiners, including Sinopec, CNPC, CNOOC, Sinochem Group and China National Aviation Fuel Co, have been allowed to export refined products.
The allotment to Norinco will go to the group's subsidiary refinery, Huajin Petrochemical, based in northeast China's Liaoning province, which aims to use the quota for diesel exports, one of the officials said. Despite swelling domestic fuel inventories as a result of record refinery processing, Chinese refiners have capped overseas shipments so far this year as the coronavirus pandemic slashed global demand.
China normally issues refined fuel quotas - covering mostly diesel, gasoline and jet fuel - in several batches over a year. Low-sulfur fuel oil exports come under a separate quota. The latest batch falls under the "general trade" category, where companies receive a tax refund after transactions are completed.
As MRC informed earlier, China is in the process of building a mega petrochemical and refining complex in east China’s Shandong province. The country started the project in late October, 2020, four months after the USD20 billion project received state approval. The Yulong project to be built in Yantai, Shandong, China’s hub for independent oil refineries, consists of a 400,000-bpd oil refinery and a 3-MM-ton-per-year ethylene plant, Reuters reported in June.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
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