Asian diesel exports to Latin America likely to slow amid new refineries
By ERIC YEP
Asian diesel exports to Latin America will likely fall in the next couple of years as that market builds new refineries, traders said.
"Upcoming refinery additions will reduce the region's distillate import requirement," ESAI Energy said in a statement this week. "Crude distillation unit, or CDU, capacity additions of 550,000 bpd in the region between 2014 and 2016 will offset higher demand," ESAI said.
Diesel output expansion in Brazil will reduce imports -- especially after 280,000 bpd of added capacity comes on line in 2016, ESAI said.
Export-dependant oil refiners in India and Singapore have already said they expect competition from new refineries in the Middle East and Russia to crimp profit margins.
India's Reliance Industries, South Korea's SK Innovation and S-Oil, and ExxonMobil, Shell and Chevron with investments at Singapore's oil refining complex export to Brazil.
Today between 300,000 and 350,000 tons of diesel a month is shipped to South America from the Asia-Pacific. That is equal to around 80,000 bpd of gasoil, Singapore-based shipbrokers said.
However, frequent refinery outages in countries like Venezuela may support Asian diesel exports and margins, a Singapore-based trader said.
Dow Jones Newswires
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