CHINA DATA: March crude imports up 6% on month to 10.1 mil b/d

China's crude oil imports in March rose 6.2% to 10.1 million b/d from a four-month low in February, but were still 14% lower year on year, data from the General Administration of Customs showed April 13.

The year-on-year fall was due to a high base in March 2021, and analysts expected inflows in April and May to fall back to an average 9.5 million-9.8 million b/d due to high crude prices amid Russia-Ukraine war, while domestic demand worsened as reemergence of COVID-19.

China's imports of 11.74 million b/d in March 2021 was the last time the volume was above the 11 million b/d, GAC data showed.

China's crude imports in the first quarter averaged 10.41 million b/d, down 8.1% year on year.

Month on month, Chinese buyers raised their crude imports in March as they planned to boost refinery runs for the domestic demand recovery following the Lunar New Year holiday and Beijing Winter Olympics.

In addition, the increase was more likely to be from the state-owned sector, as S&P Global Commodity Insights' data showed independent refineries cut their crude imports in March by 3.3% month on month to 2.86 million b/d.

However, refineries cut their throughput in March as high crude prices cut refining margins while domestic demand was hit by COVID-19 lockdowns in major cities like Shanghai and Shenzhen.

Refiners have slowed their crude buying for delivery in coming months as a result of the ongoing situation.

Independent refineries in Shandong province have cut their average utilization rate below 50% as of April from about 57.1% in March, while state-run refineries have also cut their April throughput by 30,000-100,000 mt from their initial plans amid a wider transportation restrictions to cap the spread of COVID-19.

"Crude imports are estimated to fall to around 9.6 million b/d in April/May," a Beijing-based analyst said.

Analysts at S&P Global cut their demand forecasts for April by more than 1 million and for May by nearly 600,000 b/d in their monthly report.

Oil product exports to rise

China is likely to increase oil product exports in April to offset inventory pressure despite the volume being limited by export quota availability.

China exported 4.07 million mt of oil products in March, down 40% from a high base a year ago, GAC data showed, due to tight quota availability.

The oil products included fuel oil, gasoil, gasoline and jet fuel.

The oil product outflow volume fell 36% on the year to 11.36 million mt in Q1 as the reduction in gasoil gasoline and jet fuel exceeded the increase in bonded bunker fuel oil exports. As a result, China's net oil product exports fell 58% to 4.87 million mt in the first three months.

China was initially estimated to export 416,000 mt of gasoline and 140,000 mt of gasoil in April, while the volumes were now expected to be doubled, market sources said.

2Oil products stock is rising, forcing refiners to upward adjust their export plans, especially gasoline," a product trader in East China said.

However, the government cut oil product quota awards by 56% year on year in the first-round allocation for 2022 to 13 million mt.

China's oil trade (million mt)

Source: General Administration of Customs