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China fuel demand is on track to hit record highs in 2021 despite COVID cloud

August 10/2021

MOSCOW (MRC) -- China's fuel demand is on track to hit record highs this year on a rebound in car sales and booming domestic air travel, even as a resurgence of COVID cases slows movement in some cities in the near term, reported Reuters with reference to analysts.

Despite slowing growth for diesel, the main industrial fuel, overall consumption of gasoline, diesel and aviation fuel in the world's top crude oil importer is expected to grow by 7% to 11% in 2021 to a record between 8.4 million and 8.9 million barrels per day, analysts at consultancy SIA Energy, IHS Markit and Energy Aspects estimated.

By comparison, the International Energy Agency (IEA) in March forecast China's demand for gasoline, jet fuel and diesel would rise by 6.5% to 8.2 million bpd in 2021.

China's strong growth in fuel use has helped stoke a 50% jump in global crude oil prices from 2020.

The latest outbreaks of the COVID-19 Delta variant across 17 provinces are expected to constrain travel in the near term, but analysts say the overall growth trend remains intact.

"If fast containment can be achieved by mass testing, and future large-scale outbreaks can be avoided with the vaccination rollout, gasoline and jet will be still on track to hit a record," ISH Markit analyst Shi Fenglei said.

Gasoline demand, which accounts for a quarter of China's refined fuel use, is forecast to rise by 11% to 13% this year to a record 3.8 million to 4.1 million barrels per day, well above the IEA's March forecast of 3.5 million bpd.

"Gasoline leads the growth as people drive more for long-distance travel, (there are) more ride-hailing services and motorbike e-commerce deliveries," said Seng Yick Tee, senior director at SIA Energy.

New passenger vehicle sales are expected to rise 7% this year, marking China's first annual growth since 2017, said Tao Gao, light vehicle specialist with IHS Markit.

As MRC wrote earlier, China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes.

We remind that earlier this year, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, medicine, petrochemistry, Exxon Mobil, Sinopec, China.
Category:General News
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