* Sinopec likely to export about 300,000 T diesel a month from Q4 -sources
* Similar volumes seen stretching into 2014 as refining capacity added -sources
* Asian diesel margins could come under pressure from excess cargoes
* PetroChina likely to resume diesel exports, but volume minimal
By Jessica Jaganathan
SINGAPORE, Oct 23 (Reuters) - Top Chinese refiner Sinopec Corp’s return to large-volume diesel exports in the fourth quarter will likely continue into the new year, as supply swells with additional refining capacity while demand growth remains weak, industry sources said.
Sinopec will likely export about 300,000 tonnes of diesel a month over October to December, the sources said, slightly lower than expected after it won a quota to export more than a million tonnes in the fourth quarter.
Given China’s supply and demand prospects, the sources added, the diesel export volumes are likely to continue in 2014 at about the same levels.
Beijing has a growth target of 7.5 percent for 2013, which would be the weakest rate in more than 20 years, and it has repeatedly said it would accept slower growth as it tries to restructure its economy.
This could hamper diesel demand in the country as the fuel is used in construction, factories and as a transport fuel for heavy vehicles.
“I don’t think we will see the kind of growth that we saw in China in 2008, so with refinery capacity growing at this rate, exports will probably remain high next year,” a source with a Chinese state-refiner said.
China will likely add some 3 million barrels per day or about another quarter to its refining capacity between 2013 and 2015, according to industry officials and Chinese media.
Asian diesel margins could come under pressure once the Chinese cargoes start to flood the markets, traders said. The average monthly diesel margin in September was the lowest since May, at $16.74 a barrel above Dubai crude, Reuters data showed.
China, the world’s second-largest oil consumer, became a net diesel exporter in mid-2012. It controls shipments of diesel by issuing quarterly export quotas to a few state-run traders to ensure adequate domestic supply.
China exported between 120,000 to 420,000 tonnes a month of diesel in the first six months of the year, according to official customs figures. Volumes dropped to between 62,000 and 140,000 tonnes a month in the third quarter after refiners used up government-issue quotas controlling sales for the first half of the year.
The country’s second largest refiner PetroChina is also expected to resume diesel exports in the fourth quarter, though volumes are likely to be marginal, a source close to the matter said.
“Traditionally, PetroChina is usually short of diesel while Sinopec has excess diesel due to their crude slate and different demand areas they cater to,” a Singapore-based trader said. (Editing by Tom Hogue)