China's crude oil imports in March edged up 0.9% year on year to 23.25 million mt or an average 5.5 million b/d, according to preliminary data released Thursday by the General Administration of Customs.

The imports were down 8.8% from February's average crude intake of 6.03 million b/d, which had been a year-on-year surge of 10.9%.

The March crude inflows reflect a slip from prior months. Average monthly imports were above 6 million b/d from December to February.

Still, China's total crude imports rose 8.3% year on year to 74.72 million mt during the first quarter of this year, averaging 6.09 million b/d.

China did not export any crude last month, the first time exports were skipped in five years. Net crude imports in March rose 2.1% year on year.

Total crude exports in Q1 plunged 60.6% year on year to 250,000 mt, bringing net crude imports over the period to 74.47 million mt, or an average 6.07 million b/d, representing a rise of 9% year on year.

On oil products, China flipped into a net exporter in March for the first time since January 2010.

FLIPS TO NET OIL PRODUCT EXPORTER

Total oil product imports slumped 24.3% year on year to 2.37 million mt in March, the lowest monthly level since August 2012. On the other hand, oil product exports rose 3.4% year on year to 2.74 million mt last month, the highest since May 2013.

This resulted in net oil product exports of 370,000 mt last month, compared with net oil product imports of 480,000 mt in March 2013.

China is traditionally a net importer of oil products. The last time it was a net exporter was in December 2009 and January 2010 -- with volumes totaling 80,000 mt and 160,000 mt, respectively -- when refiners had ramped up their crude throughput in anticipation of higher winter oil product demand. But they later exported more gasoline and jet/kerosene when actual consumption was weaker than expected.

Throughout much of 2009, refiners were also encouraged to increase their run rates and take advantage of export markets following a revised domestic oil product pricing mechanism implemented early in the year that guaranteed the refiners positive margins.

WEAKENING OIL DEMAND

This time too, domestic demand is likely to have been a key contributing factor to the net oil product outflows as China's GDP growth has receded to under 8%. Oil demand growth has consequently weakened in the last year, and China now faces overcapacity in its refining sector.

Platts calculations show that China's apparent oil demand -- calculated by adding refinery throughput to net oil product imports -- from January to February contracted by 1.9% year on year to 10.03 million b/d, on the back of declines in both refinery runs and net oil product inflows.

Analysts have said the typical slowdown in economic activity associated with the Chinese New Year holiday, which fell in the first week of February this year, was more acute than in previous years, resulting in weaker-than-expected Q1 energy consumption.

Meanwhile, commercial oil product stocks at the end of February, particularly for gasoil, likely expanded to their highest levels in at least four years, according to Platts estimates.

More refineries have been granted permission to export oil products in the last few months -- the latest being state-owned China National Offshore Oil Corp.'s 12 million mt/year Huizhou refinery in Guangdong province.

The preliminary customs data released Thursday also provided import figures for fuel oil and petroleum gases, although their export data was not released.

Imports of the No. 5-7 fuel oil grade last month totaled 1.51 million mt, sliding 21.8% year on year, while Q1 shipments fell 19.5% year on year to 5.57 million mt.

Imports of petroleum gases and other gaseous hydrocarbons, including LNG, totaled 1.81 million mt last month, up 29.3% from March 2013. Cumulative inflows for January to March jumped 45.3% year on year to 6.78 million mt, according to the data.

Over January to March, China's total oil product imports fell 18.1% year on year to 8.54 million mt while oil product exports slid 3.7% to 7.01 million mt, bringing net oil product imports to 1.53 million mt, down 51.3% from Q1 2013.

Preliminary output data for March, including refinery throughput, is expected to be released next week by the National Bureau of Statistics.