China fuel exports hit record in July, crude imports up 1.2pc

BEIJING: China's fuel exports rose to a record in July as easing demand growth and a surplus in refined oil products pushed refiners to increase shipments to overseas buyers.

The refined fuel exports surged 52.3 percent from a year ago to a monthly record 4.57 million tonnes, data from the General Administration of Customs showed on Monday.

China imported 2.08 million tonnes of oil products in July, down 13 percent from last year, leaving net exports at 2.49 million tonnes, or 562,258 barrels per day (bpd).

China's exports of fuel products have risen sharply this year, up around 46 percent for the January-July period, reflecting this year's swelling refinery throughput at private oil processors and adding to worries that refining margins might come under persistent pressure.

"Growth in China's fuel exports will be strong throughout the third quarter," a Beijing-based trader said. "Refiners are starting to tighten crude runs as well as increase exports to balance the surplus in the domestic market."

The domestic oil product surplus and rising crude stockpiles are dragging on growth in crude oil imports, which rose just 1.2 percent from a year ago to 31.07 million tonnes in July, or about 7.32 million bpd, the customs data showed.

On a daily basis the volume was the lowest since January, and down from June's 7.45 million bpd. It was the second month that annual growth in crude imports had eased.

Thomson Reuters' Research had estimated July's crude imports

China's private or independent refiners, known as teapots, have been a main driver of crude imports, ramping up refinery runs despite the oil product glut and accounting for over half of incremental crude oil purchases in the first half of 2016.

International trading houses as well as major oil exporting countries are eyeing this new group of crude buyers, who are rushing to fulfil their import quota before the year end.

The National Iranian Oil Company (NIOC) sold a 2 million-barrel cargo to teapots in July, following rare shipments to the independents from Saudi Arabia and Kuwait.

For the first seven months of the year, China imported 217.6 million tonnes of crude oil, or 7.46 million bpd, up 12 percent.