China’s crude oil imports rose nearly 12 per cent in May from a low base in a year earlier, although refiners were still battling high inventories with COVID-19 lockdowns and a slowing economy weighing on fuel demand last month.
The world’s top crude oil buyer imported 45.83 million tonnes last month, data from the General Administration of Customs showed on Thursday, equivalent to 10.79 million barrels per day (bpd). That compares to 10.5 million bpd in April and to a 2021 average of 10.3 million bpd.
January-May imports were down 1.7 per cent versus the same period last year at 217 million tonnes, or about 10.49 million bpd.
Refinery runs last month clawed back after steep falls in March and April as some independent refiners lifted production or returned from plant maintenance, said traders and analysts.
Plant utilization at independent plants in Shandong province in eastern China rose to above 60 per cent last week from rates below 50 per cent in April, but several state refineries were still in turnarounds, according to Chinese commodities consultancy JLC.
Crude inventories, meanwhile, stood at the highest since July 2021, climbing week-on-week since end-March to just over 920 million barrels, according to Vortexa Analytics, which tracks inventories of the country’s above-ground storage farms.
That’s sufficient for about two months of refinery processing.
The data also showed refined oil product exports were at 3.27 million tonnes for May, down 40 per cent from the previous year’s 5.41 million tonnes. Year-to-date exports were down 38.5 per cent.
Despite record export margins spurred by global demand recovery and disrupted Russian supplies, China has curbed its fuel exports – especially of diesel and gasoline – maintaining a broad policy implemented in late 2021 to limit excessive domestic refining.
China issued 4.5 million tonnes of quotas for refined fuel exports this week, sources told Reuters, a top-up to the first issue of quotas for 2022, to ease high domestic inventories as local demand was dented by COVID-19 lockdowns.
Natural gas imports – via both pipelines and as liquefied natural gas (LNG)- last month were 9.07 million tones, down from May last year. Imports for the first five months were down 9.3 per cent to 44.91 million tonnes.
The fall was mostly driven by China’s declining LNG imports, forecast to fall by as much as 19 per cent this year due to waning domestic consumption for the super-chilled fuel.
(1 tonne = 7.3 barrels for crude oil conversion)