China’s crude oil imports in June were down 11% from a high base a year earlier, official customs data showed on Friday, as independent refiners continued to curb production due to weak profit margins and fuel demand remained tepid.
Data from the General Administration of Customs showed that 46.45 million metric tons, or about 11.3 million barrels a day (bpd), of crude oil arrived in the world’s largest crude oil buyer in June.
That’s 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 consumption for both gasoline and diesel are weighing on refining margins.
Imports for the first half of 2024 totaled about 275 million tons, or 11.05 million bpd, down 2.3% on the year, in one of the few and the steepest annual declines for year-to-date volumes since early 2023, according to Reuters’ records of customs data.
According to Chinese commodities consultancy Sublime China Information, gasoline demand between January and May fell nearly 2% year-on-year, and diesel demand dropped 14%.
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 purchases in part for the month.
However, smaller independent plants in the eastern refining hub of Shandong, which make up one-fifth of the country’s total imports, continued to curb buying in the 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.
Source: MarketScreener
