Diesel demand in France appears low, as subdued construction activity and broader industrial confidence lags in the EU's second largest economy.
Diesel consumption in France was 77,900 t/d (580,000 b/d) in May, according to industry association Ufip. This represented an annual contraction of 7.8pc, outpacing a 2.7pc fall in diesel's share of the road fuels market, as demand in the wider French economy faltered in May and June.
The country's statistics and economic studies institute Insee pointed to a sixth consecutive fall in the monthly business climate index for construction in June, as perceived economic uncertainty in the sector rose to the highest level since the start of this year. The number of building permits for housing fell by around a quarter on the year to 31,700 in May. Anticipated activity in the construction sector fell to the lowest since December 2020. Diesel is widely used in construction fleets and equipment.
The manufacturing business climate index was down by 7pc year on year in June, although it was at a two-month high. Business leaders in manufacturing saw economic uncertainty at its highest since March, though this was slightly down on the year.
The National Federation of Road Transport (FNTR) noted a fall in French activity in the first quarter of this year, and predicted the same level of activity in the April-June period. More than half of FNTR members were dissatisfied with the current situation, up from 42pc in the last quarter of 2022. The majority of heavy goods vehicles transporting manufactured goods use diesel as the standard road fuel.
Diesel cargo arrivals in France between 1-27 June fell to 27,800 t/d, down by 28pc from June last year and down from 43,700 t/d in May this year. By contrast, diesel and gasoil cargo supply into the EU and UK had risen by 8pc on the year, despite a slowdown in arrivals this month from suppliers east of Suez. France is not the only European country facing economic headwinds, as economic indicators for Germany and the broader eurozone hint at more pessimistic economic conditions in June.
