Gasoil demand from Belgium, France, Belgium, Germany and Switzerland -- the main consumption centers in Northwest Europe -- is down a quarter this winter amid mild weather and a longer-term shift away from the product, traders said Monday.
Belgium has seen a 15-20% fall in demand, according to traders, with France reported to be 20-30% lower, Switzerland off 30% and Germany something similar.
Many countries have been switching to the lower sulfur gasoil grade of 50 ppm, or using other alternatives such as natural gas or electric heating.
"There is some Belgian and Swiss demand for 0.1% [gasoil] but German end-user stocks are OK and the cold is not there. Every day the weather remains good is a lost day of burning heating oil", said one trader.
"The French market is dying a slow death", said a second trader. "Some lifters have had to resell their term supply back into the spot market. That is when you know the demand is very weak", he said.
Traders said France remained a major gasoil consumer in Northwest Europe, even if its diesel imports were a lot bigger by comparison.
"The FOD market is the French market", said one trader. "High sulfur is mainly France. The French ports are the most important ports for 0.1% gasoil nowadays", said another.
The French ports of Brest and Lorient import around 600,000 mt/year together, while La Pallice and Le Havre each import around 600,000 mt. Dunkirk, meanwhile, imports about 300,000 mt/year of gasoil, traders said.
Colder than normal weather in the US this winter incentivized gasoil exports from the Baltics and Northwest Europe, which supported the market. That arbitrage has been less profitable over the past few weeks.
