China’s apparent oil demand* in October rose 2.9% year over year to 42.65 million metric tons (mt), or an average 10.09 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data. The official data has also showed that China’s year-to-date import and export volumes between January and October are at a net balance.
Stimulus measures implemented by the Chinese government and autumn harvest activity in the farming sector continued to buoy domestic oil demand going into the fourth quarter. Some of these measures include the loosening of credit controls, and the lifting of the annual summer ban on fishing in China’s waters.
Despite the year-over-year increase, China’s apparent oil demand in October slipped 2.5% from September. Meanwhile, total apparent oil demand was 9.96 million b/d during the first 10 months of the year, an increase of 2% from the same period last year.
In an unprecedented development, China has become exactly balanced in oil products trade over January to October this year, with oil product imports and oil product exports at exactly the same volume.
Platts senior writer for China, Song Yen Ling, said: “With refiners continuing to request for export quotas, there appears to be more room for exports to grow right until the end of the year, and China could very well be a net exporter of oil products this year.”
Crude throughput by refineries in October rose 6.3% year over year to 43.51 million mt, or an average 10.29 million b/d, according to data released by the National Bureau of Statistics (NBS) mid-November.
China’s oil product imports tumbled 22.2% year over year to 2.28 million mt in October, while exports soared 30.3% to 3.14 million mt, according to data released by the General Administration of Customs. As a result, China was a net exporter of oil products in October, with volumes hitting a record 860,000 mt.
China’s apparent demand for gasoil in October climbed 5.3% from a year ago to 15.06 million mt – the highest growth rate since September 2012. Last month’s domestic production of the fuel was 15.36 million mt, up 5.6% on a year-over-year basis while net outflows of the fuel jumped 22.4% to 300,000 mt.
Apparent demand for gasoline in China continued its upward trend, increasing 11.1% year over year to 8.87 million mt in October. Domestic production jumped 14.9% year over year to 9.54 million mt last month, although exports reached a four-year monthly high of 670,000 mt.
Fuel oil apparent demand in October slumped 31.4% year over year to 2.27 million mt. Lower consumption, particularly by the bunker sector and independent “teapot” refineries, has resulted in lower imports this year. Overall fuel oil net imports hit a 10-month low of 160,000 mt in October, compared with 850,000 mt a year ago.
Month-to-month demand in China is generally viewed to be subjected to short-term anomalies which are of interest and important to note, but often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.
*Platts calculates China’s apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the NBS and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.
The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country’s actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.
Platts releases its monthly calculation of China’s apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts. Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the widely-accepted benchmark for markets East of Suez.