SINGAPORE: China’s crude oil imports in June dropped 11% from a high base a year earlier and first-half imports fell 2.3% in a rare year-to-date decline, data showed on Friday, as fuel demand disappoints and as independent refiners reduced production due to weak profit margins.
June arrivals into the world’s largest crude oil buyer were 46.45 million metric tons, or about 11.3 million barrels a day (bpd), data from the General Administration of Customs showed.
That was up slightly from 11.06 million bpd in May but off from an all-time high at 12.67 million bpd in June 2023.
Higher crude oil prices and weaker-than-expected domestic consumptions for both gasoline and diesel are weighing on refining margins.
The International Energy Agency said on Thursday that China’s share in global oil demand growth is declining to 40% this year from last year’s 70% as its second-quarter consumption contracted due to economic challenges.
Imports for the first-half of 2024 totalled about 275 million tons, or 11.05 million bpd, down 2.3% on the year, in one of the few annual declines and the steepest fall for year-to-date volumes since early 2023, according to Reuters’ records of customs data.
Gasoline demand between January and May fell nearly 2% year-on-year and that of diesel dropped 14%, according to Chinese commodities consultancy Sublime China Information.
Large refineries such as privately controlled Hengli Petrochemical, state-run Sinopec’s Zhanjiang and PetroChina’s Dalian plants completed planned maintenance in late May and June, supporting in part purchases for the month.
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However, smaller independent plants in the eastern refining hub of Shandong that make up one-fifth of the country’s total imports, continued to curb buying in face of prolonged thin margins, with some shifting to lower-priced fuel oil as feedstock.
Crude oil imports may receive additional support in the coming months from a government mandate to boost state reserves by nearly 60 million barrels by next March.
China’s natural gas imports for June held steady from a year earlier at 10.43 million tons, bringing the total for the first half of 2024 to 64.65 million tons, or 14.3% above the year-earlier levels.
Exports of refined oil products, which include diesel, gasoline, aviation fuel and marine fuel, expanded 19% from a year earlier to 5.37 million for June, a level flat versus May.
Exports for the first half of 2024 eased 3.8% on the year to 30.09 million tons.