China’s oil imports crept higher in July, as the appetite for foreign crude among the country’s independent refiners continued to surge.
China imported 31.07 million metric tons of crude oil in July, equivalent to about 7.35 million barrels a day, preliminary data from the General Administration of Customs showed Monday.
Imports rose 1.2% from the 30.71 million tons of crude brought in during the same month last year. They fell 3.1% from 32.06 million tons imported in June.
So far this year, China has imported 217.6 million tons of oil, up 12% from the same period a year ago.
Robust demand for foreign crude by Chinese refineries has made the country a formidable driver in global oil markets. Some analysts believe as more Chinese refiners expand overseas, China’s demand for crude will remain elevated and could even push China to oust the U.S. as the world’s biggest oil importer.
But recent trade data suggest that a growing portion of China’s imported oil isn’t being consumed domestically, but is instead working its way into the regional export market. In July, exports of refined products soared 52% to 4.57 million tons.
July’s oil-import figure was broadly in line with analyst expectations for a rise in imports due to strong demand from China’s refiners and growing inventory stockpiling.
“China’s crude imports is likely to grow by 10% on-year in 2016 to 7.4 million barrels a day as more independently owned refineries need more crude to support their expanding production,” said Song Yen Ling, senior analyst at S&P Global Platts.
However, issues like port congestion and growing inventories of refined products could hinder refineries’ appetite for foreign crude in the coming months. Many refiners are also expected to undergo their seasonal maintenance in the autumn, while the rebound in oil prices from lows reached early this year could curb demand for imports being stockpiled under China’s strategic reserve program.
A higher refining rate coupled with softening fuel demand has curbed refined-fuel imports to China. In July, China imported 2.1 million tons of refined products, down 13% from July last year.