According to the US EIA, Chinese exports of diesel began to increase rapidly in 2015, driven by a structural shift in China's economy and by reforms in China's refining sector. These two factors have pushed Chinese net diesel exports higher, to more than 300 000 bpd in April.
Current low prices in global diesel markets can be attributed to slow demand growth, high inventories as a result of reduced winter heating demand in the United States and Europe, and from new or expanded refinery capacity in the Middle East designed to maximise diesel production. Particularly relevant to the Asia-Pacific market is the emergence of China as a growing net exporter of diesel.
China's economy is gradually moving towards commercial services and personal domestic consumption. As part of this transition, demand for gasoline and jet fuel has grown more than the demand for diesel. Chinese refineries increased refinery runs to meet demand for gasoline. Slower demand growth for diesel combined with increased coproduction of diesel has resulted in high inventories and increased supply in China.
Edited from press release by Angharad Lock