A crude oil tanker at Qingdao Port, in Shandong province, China, on April 21, 2019.Jason Lee/Reuters
China’s crude oil imports in March surged 22.5 per cent from a year earlier to the highest since June 2020, data showed on Thursday, as refiners stepped up runs to capture fuel export demand and in anticipation of a domestic economic recovery.
Crude imports in March totalled 52.3 million tonnes, or 12.3 million barrels per day (bpd), according to data from the General Administration of Customs. This compares with 10.1 million bpd of crude imported in March last year.
The imports were in line with expectations of higher refinery runs and product inventory draws on improved demand following the lifting of COVID restrictions late last year.
Analysts pointed to a sharp increase in refined fuel product exports as a key reason behind the jump in crude imports. Refined product exports jumped 35.1 per cent to 5.5 million tonnes for March, versus 4.1 million tonnes in the same month of 2022.
“Refined fuel exports will increase, as currently the margins on exported gasoline are quite positive,” said Xu Peng, a refined products analyst at China-based commodities consultancy JLC.
“The growth of diesel demand has been less than expected, while (domestic) gasoline consumption was relatively flat,” Xu added.
Kerosene consumption had also been widely anticipated to increase through March, as the country’s aviation sector rebounds following the lifting of travel curbs.
Analysts also cited lower costs of Russian crude as a factor driving China’s imports.
“Lower prices and discounted Russian oil along with improving demand prospects are behind the rise,” stated analysts from ANZ Bank in a client note.
Crude demand had also been expected to increase at big private refiners such at Zhejiang Petrochemical (ZPC) and Hengli Petrochemical, which are reportedly operating at or above official processing rates to profit from stronger refining margins.
ZPC and Hengli account for 6.5 per cent of China’s refining capacity.
Total crude imports for the first quarter stood at 136.6 million tonnes, a 6.7 per cent increase over 127.9 million tonnes in the same period last year.
China imported 8.9 million tonnes of natural gas in March, up 11.2 per cent from 8.0 million tonnes a year ago. Total natural gas imports for the first quarter stood at 26.7 million tonnes, down 3.6 per cent on last year.