China’s crude oil imports rose to record on a monthly basis driven by imports by small, private refineries amid low oil prices.
Overseas purchases by China increased to 30.71 million metric tons in July, equivalent to about 7.3 million barrels a day, according to preliminary data released by the Beijing-based General Administration of Customs on Saturday. It was higher than December’s level at 30.4 million tons, a previous monthly record. The world’s second-largest oil consumer imported a record 7.4 million barrels a day in April and 7.2 million in June.
The nation also allowed the first of its so-called teapot refiners to use overseas crude last month, boosting oil demand. China began filling the second phase of emergency reserves in the eastern city of Qingdao with two Russian cargoes in June, ICIS China, a Shanghai-based commodity researcher, said July 1.
“State traders may have boosted purchase on back of coming demand from teapots as they gain more import quota,” Gao Jian, an analyst with SCI International, a Shandong-based energy consultant, said by phone. “Refinery utilization rates are quite high with improved refining margins.”
Filling emergency inventories was estimated by Citigroup Inc. to account for 49 million barrels of imports in the first half of this year, or about 268,000 barrels a day. The nation’s refiners processed a record 10.59 million barrels a day of oil in June, according to data from the country’s National Bureau of Statistics. Processing rates in July, which have not been released yet, were likely to be little changed near those levels, according to Amy Sun, an analyst with ICIS China.
Crude demand from the so-called teapot refineries that get quotas to use imported oil will rise to 815,000 barrels a day from 359,000 barrels a day by the end of this year, according to Citigroup. The Shandong Dongming Petrochemical Group, China’s largest independent refinery by capacity, received its first imported crude cargo on July 21 after the plant was given final approval by the National Development and Reform Commission to access 7.5 million tons of foreign supplies a year.
China’s apparent oil consumption averaged about 10.5 million barrels a day in the first half of the year, 4.8 percent higher from a year earlier, according to Energy Aspects Ltd., a London-based consultant.
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