China's gasoline demand is projected to sag in March on falling traveling needs, weighing on the prices as the production is unlikely to decline, per OilChem survey.
In detail, the daily gasoline consumption is estimated to fall roughly 10% month on month (MoM) at 445,000 tonnes/day in March, primarily because of the falling traveling demand compared with the Chinese New Year (CNY) holiday, and electric vehicles resuming popularity when the temperature rebounds, according to OilChem prediction model.
Source: Mysteel OilChem
On the supply side, the daily gasoline production is expected to edge down 1% MoM at 480,000 tonnes/day in March.
Separately, the state-owned refineries' daily gasoline production scheduling has dropped 4% MoM, but the independent ones, especially those in Shandong Province, are planning to lift the production to make up for the production loss during the CNY holiday. Nevertheless, the rebound will be insignificant considering the on-going maintenance.
Source: Mysteel OilChem
The gasoline exports are planned at 0.73 million tonnes in March, basically flat from that in February. But the actual exports may be higher in the face of potentially expanding export profits.
Taken together, China's gasoline inventory is likely to see a month growth of 0.3 million tonnes at approximately 16.4 million tonnes.
Generally speaking, the sagging domestic demand and international crude oil prices losing momentum are more than likely to pull down China's gasoline prices. But the extensive stockpiling expected ahead of the Qingming Festival is likely to trigger a short rally.
Written by Aggie Hu, huchenying@mysteel.com
Edited by Navy Liu, liuchuanjun@mysteel.com