CHINA DATA: May oil product imports drop 22% from historic high in April

China's oil product imports dropped 21.5% to 4.45 million mt in May from a historic high in April, data from the General Administration of Customs showed June 7, as independent refineries cut feedstock fuel oil purchases.

Independent refineries' fuel oil imports slumped 45.4% to 1.1 million mt in May from an all-time high of 2 million mt in April, with the trend likely to continue in June amid rising import cost, according S&P Global Commodity Insights data and market sources.

The GAC's oil product import and export data tends to include a basket of oil products, with gasoline, gasoil, jet fuel and fuel oil accounting for the majority. The breakdown of products is to be released June 20.

Meanwhile, oil product exports gained almost 18% month on month to 5.35 million mt in May, making the country flip back to being a net product exporter in the month.

However, the outflows in January-May remained 7.7% below the level in the same period of last year, in line with the country's cautious approach toward clean product exports that emerged at the beginning of 2024.

Trading sources said the newly issued 18 million mt of export quotas in early May for clean oil products and bunkering fuel oil allowed a rebound in the outflows from April.

Commodity Insights analysts expected a moderate recovery in clean oil product exports in May, driven by the resumption of refinery operations, renewed export quotas and persistently high gasoil inventory, it said in a monthly report dated May 31.

"While it is unlikely to reach the high level seen in March, June is expected to bring a second wave of exports in 2024, supported by prestocking demand in the regional market and a seasonal lull in the domestic market," it added and estimated clean product exports in Q2 wold decline about 5% to 841,000 b/d from Q1.

Crude imports down on year

China's crude imports dropped 8.7% year on year to 11.11 million b/d (46.97 million mt) in May, as several state-owned and private refineries remained shut for scheduled maintenance works.

Commodity Insights data showed the average utilization rate at 51 state-owned refining plants stood at a 12-month low of 78.70% in May, down from the 80.9% in April and from the six-month high of 83.4% in March. The reduction was unlikely to be compensated despite the 800,000 b/d Zhejiang Petroleum & Chemical having restarted from scheduled maintenance in May, boosting utilization to around 103% from 87.5% in April.

The decline led imports by Asia's top crude consumer to fall 1.1% year on year to average 11.04 million b/d in the first five months of 2024, the GAC data showed.

GAC releases data in metric tons that Commodity Insights converts to barrels using a 7.33 conversion factor. On a metric tons basis, the volume stood at 229.03 million mt in the first five months of the year, edging down 0.4% against the same period of 2023.

In the short term, some market analysts expect China's demand for imported crude to improve as refining margins recover amid weak crude prices, while some independent refineries have returned to using more crude as a feedstock rather than fuel oil supplies.

Commodity Insights analysts expect decelerating growth in refinery runs to lead to significantly weaker annual growth in China's crude imports this year, dropping from 1.1 million b/d in 2023 to 72,000 b/d in 2024.

China's oil trade data (mil mt)

Source: China's General Administration of Customs