China’s daily crude oil imports low in July

China’s daily crude oil imports hit their lowest point in July 2024 since September 2022 due to weak processing margins and low fuel demand at state and independent refineries, according to Reuters’ records of customs data.

In July 2024, the country imported 42.34 million metric tons, or about 9.97 million barrels per day (bpd), reflecting a nearly 12 per cent decline from the previous month and a 3 per cent decrease from the previous year.

High crude oil prices and weaker-than-expected domestic consumption of gasoline and diesel have squeezed refining profits. Chinese consultancy Oilchem reported that independent refiners operated at 56.11 per cent capacity in July, the lowest in three years, which is down 7.3 percentage points from a year earlier.

Oilchem further noted that there was minimal improvement in gasoline or diesel demand, with lower refining margins than the previous year. As a result, some refiners, like two plants owned by the state group Sinochem, were shut indefinitely for maintenance to stem losses.

State refiners also faced challenges, with Sinopec Corp posting only 0.1 per cent year-on-year (YoY) growth in crude processing but a nearly 9 per cent fall in diesel output in the first six months.

For the first seven months of the year, crude oil imports totaled 317.8 million tons, or 10.89 million bpd, marking a 2.4 percent YoY decline, which is the steepest since early 2023. Although some additional crude oil was bought in July for an East China storage base under a government mandate, the volume was small.

Moreover, China’s July natural gas imports rose to 10.86 million tons, bringing the year-to-date total to 75.44 million tons, up 12.9 per cent from the previous year. However, refined oil product exports, including diesel, gasoline, aviation fuel, and marine fuel, were 4.98 million tons, down from 5.37 million tons in June, and fell 4.1 percent YoY from January to July to 35.08 million tons.

Attribution: Reuters