CHINA DATA: Sep crude imports edge down 0.6% on year

China's crude imports narrowed the monthly year-on-year reduction to 0.6% in September, the lowest since May, data from the General Administration of Customs showed Oct.14, suggesting a slight improvement in the typical peak demand season.

The country's crude inflow has registered year-on-year declines since May, with the deepest drop by 10.8% in June, as demand for clean oil products likely peaked.

As a result, the volume in January-September continued to fall, down 3.1% year on year to average 11.03 million b/d, GAC data showed.

Imports stood at 11.11 million b/d in September, a typical peak demand season for fishing, harvest and construction.

It represented a 4.3%, or 500,000 b/d, fall from the year-to-date-high of 11.61 million b/d in August.

But the month-on-month decline could be partly offset by destocking activities in September. Satellite data from Ursa showed that China's onshore crude inventory fell by 9 million barrels from August to 1.11 billion barrels.

Moreover, the month-on-month reduction was more likely contributed by the state-owned sector, as S&P Global Commodity Insights' data showed their independent peers' crude imports, led by the greenfield Yulong Petrochemical facility, rose 3.6% from August to 3.57 million b/d in September.

In Q4, S&P Global Commodity Insights expected 1.6%, or 179,000 b/d, of year-on-year growth as Yulong Petrochemical came online in late September and due to the relatively low basis in Q4 2023.

But there was a downside risk as small independent refineries are estimated to have around 1.44 b/d of crude import quotas for use in Q4, lower by about 400,000 b/d from the average crude inflows of 1.84 million b/d seen in January-September, a different set of Commodity Insights data showed.

The GAC releases data in metric tons that S&P Global Commodity Insights converts to barrels using a 7.33 conversion factor. On a metric-ton basis, the volume in July fell 7.4% from September.

Oil products exports reach 3-month high

Oil products exports in September were at 5.19 million metric tons in September, the highest since the 5.37 MMt seen in June despite a 4.5% year-on-year decline, the customs data showed.

This brought the products outflow to 45.2 MMt in the first three quarters, down by 5.7% year on year.

There has been talk that the country's top planner, the National Development and Reform Commission, would hold a meeting to discuss issues about oil products export quotas, raising hopes of having the additional allowance for 2024, according to market sources.

Beijing in late September released 8 MMt of export quotas for clean oil products, and 1 MMt for low sulfur fuel oil in the third batch. The new allocation pushed the combined export quotas to 54 MMt for 2024, almost unchanged from the 53.99 MMt for 2023,

Oil product imports were likely to fall from the five-month high of 4.48 MMt in September, as independent refineries began to cut feedstock fuel oil imports as the new tax deduction regulations will be effective soon, market sources said.

In September, these refiners imported about 1 MMt of feedstock fuel oil, up 21% from a month earlier to a five-month high, according to Commodity Insights data.

The last high of their feedstock fuel oil imports was recorded at 2.03 MMt in April, when China's oil product imports were at a multiyear high of 5.67 MMt, Commodity Insights and GAC data showed.

GAC's oil product import and export data are widely thought by market sources to have included a basket of oil products, with gasoline, gasoil, jet fuel and fuel oil accounting for the majority. The breakdown of products will be released Aug. 18.

China's preliminary oil trade data (MMt):