China April crude oil imports hit monthly record, refiners stocked up ahead of sanctions

China’s crude oil imports in April unexpectedly surged to a record despite refinery maintenance outages and tepid domestic fuel demand, customs data showed, as state-run refiners built up stocks of Iranian crude oil anticipating a sanctions clampdown.

Imports last month were 43.73 million tons, equal to 10.64 million barrels per day (Mbpd), according to data from the Chinese General Administration of Customs. That compared with 9.26 Mbpd in March and was up 11 percent from the April 2018 level, according to Reuters calculations.

China, the world’s biggest oil importer, took in 164.9 million tons of crude during the first four months of 2019, or about 10.03 million bpd, up 8.9 percent on the same period a year earlier, the data showed.

“The crude imports exceeded our expectations as both domestic refinery production and margins do not appear to support such high volumes of purchases,” said Wang Zhao, head of crude oil research at Sublime China Information Co.

“We may see stockpiles rising as state-run refiners pre-stocked supplies in April from Iran and the United States anticipating the impact of sanctions,” said Wang.

China’s Iran crude oil imports rose to 24 million barrels or about 800,000 bpd in April, the highest since August, as buyers rushed in shipments before the U.S. sanctions waiver deadline of early May, data showed.

At least two major refineries, Sinopec Luoyang and PetroChina’s Lanzhou, were shut last month for planned maintenance.

Zhou Guoxiao, an analyst with JCL, said strong buying from independent refineries also contributed to hefty imports in recent months as these plants replenished stocks ahead of resumption of production after planned overhauls.

Refined fuel exports were 6.17 million tons last month, down from 7.21 million tons in March, but up more than 20 percent from 5.12 million tons a year earlier.

China is facing a growing domestic fuel surplus as new facilities, including privately owned Hengli Petrochemical’s refinery, ramp up output while demand growth in key transportation fuels disappoints.

Total refined fuel demand in the first quarter edged up just 0.4 percent from a year earlier, state media reported. While apparent gasoline consumption gained 3.7 percent in the period, diesel usage dropped 4.1 percent.

Total natural gas imports - including piped gas from central Asia and Myanmar and liquefied natural gas shipped in tankers - were 7.65 million tons, customs data showed.

The imports were up from 6.82 million tons a year earlier and also up from 6.94 million tons in March.

Imports for the first four months increased 16.4 percent on the year to 31.89 million tons, customs said.

Reporting by Chen Aizhu in SINGAPORE and Meng Meng in BEIJING; Additional reporting by Florence Tan in SINGAPORE; Editing by Kenneth Maxwell


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