Why is demand for diesel so strong this year?
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As the title says. This year, the industrial sector is under environmental protection pressures, and overall macroeconomic demand is not strong. However, demand for diesel has been particularly good this year, with cumulative demand growth in the first three quarters reaching around +8% on a year-on-year basis! Solve~~~~~~~
I want to know this question too; our plants are operating at increased capacity to produce diesel
To summarize, the key points are as follows: 1. At the beginning of November, there was a need to upgrade diesel to National V standard and replace it with diesel of lower grade. The upgrading process was carried out in a hurry, with an earlier deadline set, and the allocation of necessary resources was inadequate; as a result, diesel supplies were strained in some areas – there was a shortage of low-grade diesel in the north and of National V diesel in the south. For example, in Shanghai, the transition period for replacement was extended. 2. Regarding crude oil, a series of events over the past two months—including anti-corruption efforts in Saudi Arabia, ongoing geopolitical risks in international markets, and production cut agreements—have led to a sharp rise in international oil prices. This increase in oil prices has created a bullish atmosphere among suppliers and consumers, driving prices upward. 3. With the allocation of the fifth batch of export quotas for refined oil under general trade, an export volume of 5 million tons will inevitably lead to the main exporting companies giving priority to their own exports, thereby reducing the supply pressure on newly commissioned domestic refineries; as a result, domestic resources will also decrease accordingly. 4. The centralized procurement by the main suppliers has led to a significant reduction in the amount of resources from local refineries that reach the market. Coupled with improvements in quality, refineries produce less diesel, resulting in a decrease in diesel supply as well. 5. The past two months have also been a peak period for diesel demand, driven by the autumn harvest, the end of the fishing ban, and efforts in the south to catch up on construction schedules. With these various positive factors, demand for diesel has remained strong. 6. **With the strictest production restrictions issued, the operating rates of refineries in the 2+26 cities have also declined, leading to a shortage on the upstream supply side.