SINGAPORE (ICIS)--The theoretical margins for China’s gasoil imports fell into negative territory in November, at minus yuan (CNY) 200.4/tonne ($29/tonne), ICIS data showed.
In October, the margins stood at CNY174.3/tonne. This meant that the import arbitrage window was again shut in November.
The average wholesale price from south China-based refiners decreased by 14.6% month on month to CNY6,740.5/tonne in the month.
Meanwhile, theoretical import prices of gasoil with sulphur content at 10ppm from Singapore averaged CNY6943.3/tonne CIF (cost, insurance & freight) in November, down by 10.1% month on month in line with lower international crude values.
Domestic gasoil demand in November was in the peak season, buoyed by logistics activities during the Double-Eleven Shopping Festival on 11 November.
However, the slump in international crude prices weighed on domestic trading sentiment. Buyers mostly purchased to cover immediate requirements.
In late November, gasoil prices were dragged down by restrained operation in the industrial sector in parts of north China.
In December, the import arbitrage window will likely remain closed. Gasoil demand in the month may be capped by slow infrastructure construction, with domestic prices expected to remain stable.
($1 = CNY6.90)