SINGAPORE: Taiwan’s gasoline exports this year are expected to fall by 50 per cent versus 2019 as its two refiners scale back supplies to combat slow demand, a move that could help keep excess supplies down, industry sources said.
Taiwan is the fourth-largest gasoline exporter after China, India and South Korea, and a reduction in its volumes would help to limit the supplies available on the market, according to Sandy Kwa of consulting firm FGE, a view shared by traders.
“Although China’s volumes can fill the void, fewer cargoes coming out of Taiwan will add to the collective efforts of run cuts in general in Asia,” said a Singapore-based fuel trader.
Taiwan has two refiners, Formosa Petrochemical Corp , which operates a 540,000 barrels per day (bpd) refinery in Mailiao, and CPC Corp, with refineries in Talin and Taoyuan that have a total capacity of 550,000 bpd.
In 2019, Formosa and CPC exported a combined average monthly of 268,000 tonnes of gasoline, about 20 per cent of China’s average monthly volumes. Formosa has already said it will reduce its gasoline exports by half to 100,000 tonnes a month this year.
“Taiwan’s domestic demand recovered in June and the overall consumption this year is not expected to lag that of 2019. But the overseas demand is weak,” Formosa’s spokesman KY Lin said last week.
CPC will cut its gasoline exports to an average of one shipment of 30,000 tonnes a month, down from three shipments a month in 2019, a source familiar with the matter said. A CPC representative was not reachable by phone for comment.
Asia’s gasoline cracks sank to discounts in March as demand fell with the spread of the coronavirus out of China, but they returned to premiums over Brent crude in June as regional supplies dwindled.