The distillates exports from China including Kerosene, Gasoil, and Gasoline are expected to experience sharp fall in 2021 in the wake of cuts in the export quotas by the Ministry of Commerce.

In an announcement made by the Ministry of Commerce, it was revealed that the quotas for second batch exports would be around 7.5 million tonnes of distillates which is a 73.24% reduction from the last year’s second batch quotas. The sharp cut in the second batch quotas is an indication of policy change as the ministry had earlier been encouraging distillate exports for the past four years.

Due to significant cuts in the second batch quotas the total quota for the first two batches this year is around 37 million tonnes which is roughly 33% less than the sum of last year’s first two batches as per the ministry data.

The change in the ministry policy has led to speculations that the third quota might not be issues this year taking the total quota for the year to 37 million tonnes down from last year’s 45 million tonnes.

Due to the reduced quotas the export volumes of major distillate exporters including PetroChina and Sinopec are expected to decrease although the companies have shown no signs of a reduced throughput.

As per ChemAnalyst, “the reduced exports from China which is one of the major distillates exporter in Asia, the prices of the distillates might take an upturn with limited supplies in the market.”