China's Sinopec to Resume Large Diesel Exports with Q4 Quota

China's top refiner Sinopec Corp is expected to resume high-volume diesel exports after Beijing approved a quota for the company to export more than 1 million tonnes in Q4, industry sources said.

Sinopec could export more than it did in the first quarter of the year, when China's stepped up diesel exports caused processing margins for the oil product to dive to their lowest in more than two years.

The exports could give rise to another diesel supply glut in Asia that would pressure margins again. Demand for the industrial and transport fuel has already dropped due to an economic slowdown in Asia exacerbated by a recent rout in emerging market currencies, traders added.

China, which became a net diesel exporter in mid-2012, controls shipments of diesel by issuing quarterly export quotas to a few state-run traders to ensure adequate domestic supply.

Beijing has approved fourth-quarter export quotas for Sinopec and the country's second largest refiner PetroChina, sources said.