China's July Gasoline Exports Fall 60% on Refinery Maintenance

China's gasoline exports fell 60 percent to the lowest this year as production dropped after domestic refiners brought forward plant maintenance because of rising crude oil costs.

Overseas sales by Asia's second-biggest gasoline exporter declined to 330,000 metric tons, an eight-month low, from 526,500 tons in June, according to customs data released today. The nation imported gasoline for the first time since March in July, according to the data.

China Petroleum & Chemical Corp. and PetroChina Co., the nation's two biggest refiners, are shutting plants as oil prices in New York reached a record $78.77 a barrel on Aug. 1, boosting costs. Benchmark gasoline prices in Singapore have fallen 18.6 percent from $91.97 a barrel reached on May 18, the highest to date, cutting Chinese refiners' earnings from potential exports.

"The unscheduled maintenance at refineries has resulted in limited gasoline supplies in the domestic market since late June," Liang Haishan, an oil analyst with Haifu Futures Brokerage Co Ltd., said by telephone in Shanghai today.

Sinopec, as China Petroleum is known, and PetroChina have shut as many as seven refineries for maintenance this summer. The Chinese government controls fuel prices to limit their impact on inflation, reducing the profit from processing a barrel of oil even further.

Plant Shutdowns

PetroChina, the nation's largest oil company, shut a 5- million-ton-a-year refinery in northwestern province of Shaanxi in early July for a maintenance that will last a month, parent China National Petroleum Corp. said Aug. 10.

Sinopec will bring forward a two-month long scheduled maintenance at Shanghai Gaoqiao Company to the middle of August from December, a refinery official said Aug. 2.

The country's so-called teapot refineries, or privately owned processing plants, are running their plants at less than half of their full capacity as processing fuel oil into diesel and gasoline becomes unprofitable because of the high crude costs, Bizer Tang, chief analyst at Guangzhou Twinace Petroleum & Chemicals Co. said Aug. 2. Guangzhou Twinace is China's largest non-state-owned fuel oil importer.

"Domestic supply of fuel products are tight because of the shutdowns," Liang said.