China Jan-June crude imports see first H1 fall since 2013
China's crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying.
Imports totalled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).
That compared with 9.65 million bpd in May and a record 12.9 million bpd in June 2020, when refiners snapped up cheap oil to supply China's quick recovery from the pandemic.
For the first half of 2021, imports into the world's top crude oil importer totalled 260.66 million tonnes, or about 10.51 million bpd, 3% lower than a year earlier.
As the impact of COVID-19 locked down most of the world, China was the only major oil consumer to increase imports in 2020, accounting for a record 19.8% share of global crude imports for the year, the BP Statistical Review of World Energy showed.
That strong appetite helped crude prices to rebound sharply last year from their April slump, but slowing purchases by China going forward may start to weigh on prices.
INDEPENDENTS LOSE ACCESS
Bumper purchases led by independent refineries, known as teapots, had bolstered imports in the first quarter of 2021, pushing inbound shipments 9.5% above the same period of 2020.
Imports fell nearly 13% in the second quarter, however, versus the first three months as inventories climbed and refining margins were squeezed by steadily rising global oil prices and a flood of imports of blending fuels, such as light cycle oil that slipped into the diesel pool.
Independent refiners also faced tighter import quotas as the government stepped up scrutiny of crude oil imports by state and private refiners to try to reduce a surplus of refining capacity and curb emissions.
Beijing restricts official crude oil imports via a quota system, but some refiners are suspected of trading on the quotas to other smaller refineries, leading to a glut of refined products that has eroded margins for the wider sector. read more
"The crackdowns on teapot crude quota trading and the non-compliant crude supply by national oil companies to teapots really hit the crude imports in June," said Seng Yick Tee, senior director at consultancy SIA Energy.
Sang Xiao, analyst at China-based Sublime Consultancy, expected the imports to stay subdued in July and August because of the quota reductions.
Tuesday's data also showed refined fuel exports in June rose by nearly two thirds versus a year earlier to 6.44 million tonnes.
Total natural gas imports, including liquefied natural gas (LNG) and piped gas, remained elevated at 10.21 million tonnes last month, compared with 10.32 million tonnes in May.
(crude conversion: 1 tonne=7.3 barrels)
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