Page 7 - AsianOil Week 30
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batch that brings the total allowed for the year to 48.15mn tonnes. is is up from the 43mn tonnes of export quotas the government issued in the same period of 2018.
PetroChina was granted 4.7mn tonnes of gas- oline export quotas in a second batch in May and traders said the company was sending cargoes to Mexico, Chile and Nigeria.
Chinese re ners loaded 1.2mn tonnes of gasoline for export as of July 23, a er a record 1.6mn tonnes was loaded in June, Reuters said, citing Re nitiv data. PetroChina’s West Paci c Petrochemical reportedly sold 900,000 barrels of gasoline to Mexico in July in three di erent
shipments. China’s gasoline output in the rst half of 2019 rose 2.9% year on year, while diesel slid 7.8%, according to National Bureau of Sta- tistics (NBS) data.
Shandong-based consultancy JLC has said this is the result of refiners changing their focus from diesel production to gas- oline, owing to declining domestic demand for diesel.
Gasoline demand, meanwhile, is slowing as demand for passenger vehicles continues to weaken. Consultancy SIA Energy has predicted that gasoline demand will climb by 5.4% this year, its slowest pace since 2015.
SK Innovation bets on stronger GRMs in Q3
PERFORMANCE
SOUTH Korean re ner SK Innovation has said it expects gross refining margins (GRMs) to improve in the third quarter a er record-low Asian margins slashed its operating pro t in the April-June period.
The company, which owns leading refiner SK Energy, revealed on July 26 that its profit plunged by 42% year on year to KRW497.5bn ($420.95mn) in the second quarter. During the period, benchmark margin the Singapore GRM dropped to a decade-low of $1 per barrel from $1.40 in the rst quarter and $2.70 in the same quarter of 2018.
SK Innovation was not the only re ner to feel the pinch, with S-Oil swinging into the red in the same three-month period. S-Oil posted a net loss of KRW147.4bn ($124.7mn) in April-June compared with a KRW163.2bn won ($138mn) net pro t in the same period of 2018. Hyundai Oilbank, meanwhile, reported a 51% fall in oper- ating pro t to KRW154.4bn ($130.6mn).
SK Innovation, however, expects its pro t mar- gins to bounce back during the second half of this year as buyers begin to stockpile and test low-sul- phur fuel oil (LSFO) ahead of new International Maritime Organisation (IMO) standards that will be implemented from January 1, 2020. e IMO rules will limit the sulphur content in maritime fuel
to 0.5% from the current 3.5%, requiring the ship- ping industry to drop high-sulphur fuel oil (HSFO) in favour of cleaner fuels.
Senior SK Energy o cial Kim Ji-yong told analysts on July 24 that the fourth-quarter pro t margin for gasoil production was likely to rise as a result of stockpiling.
S-Oil said on the same day that it also antici- pated an inventory build-up of IMO-compliant fuels would li GRMs.
Reuters reported on July 16 that South Korean re neries were testing the LSFO market and had already exported some cargoes. Re ner- ies are understood to be redirecting low-sulphur feedstocks, normally processed into gasoline, towards the production of LSFO. GS Caltex, S-Oil and Hyundai Oilbank have each sold LSFO cargoes since June, the newswire reported.
Week 30 31•July•2019 w w w . N E W S B A S E . c o m P7
