China’s apparent oil demand* in December rose 5.3% year over year to 44.96 million metric tons (mt), or an average 10.63 million barrels per day (b/d) – hitting the highest absolute demand on record – according to a just-released Platts analysis of Chinese government data.
China’s apparent oil demand in 2014 rose 3% from a year before to an average of 10.1 million b/d, which was higher than the 2% year-over-year growth seen in 2013.
Total oil product imports in 2014 tumbled 24.2% from 2013 to 30 million mt, the lowest annual level since Platts started tracking Chinese oil demand data in 2005. Exports of oil product from the country increased 4.1% to 29.67 million mt. As a result, China remained a net importer of oil products, despite being a net exporter during the first 11 months of 2014.
China’s apparent oil demand increased considerably through the year, rising to 10.34 million b/d in the fourth quarter, buoyed by a seasonal uptick in consumption as well as the government’s monetary easing measures. In comparison, apparent oil demand was recorded at 9.89 million b/d in the third quarter and 9.88 million b/d in the first half.
“Oil demand growth this year is expected to be similar to that of 2014,” said Song Yen Ling, Platts’ senior writer for China. “China’s economic growth is likely to continue slowing, with many analysts predicting GDP expansion this year to average below 7.5%.”
Crude throughput by refineries in December was up 6.3% year over year to 44.58 million mt, or a record high 10.54 million b/d, according to data released by the National Bureau of Statistics (NBS) mid-January.
On a monthly basis, China’s oil product imports were 5.3% lower year over year to 3.2 million mt in December, while exports climbed 6.8% to 2.82 million mt, according to data released by the General Administration of Customs.
Gasoil Apparent demand for gasoil, the most widely consumed oil product in China, in December was 6.7% higher than a year ago at 15.42 million mt. Up to 70% of the fuel is used in the transport sector while the remainder is used by various sectors, including construction, farming and fishing, industrial heating and to power machinery. The pace of growth in December was the fastest since July 2011.
Chinese refiners typically draw down their domestic stockpiles of gasoil throughout the year and start building inventories during the fourth quarter in preparation for the following year’s Chinese New Year holidays in January or February.
Over the whole year, China’s gasoil apparent demand rose 1.8% from 2013 to 172.72 million mt, while the previous year’s demand had contracted for the first time by 0.9%.
Gasoline Meanwhile, apparent demand for gasoline in December rose 13.4% year over year to 9.55 million mt, with full-year demand increasing 12.5% to 105.25 million mt. Gasoline consumption growth in China continues to be sustained by new passenger car sales as a new middle-class of urban consumers becomes increasingly wealthier.
Fuel Oil Fuel oil witnessed a structural decline in demand as China’s independent teapot refiners have found ways to get access to more crude supplies. This reduced their appetite for imported fuel oil, which had traditionally been their primary feedstock.
Fuel oil apparent demand in December jumped 30.5% year over year to 3.05 million mt, as low prices on the back of falling crude spurred buying. Imports of the fuel hit an 11-month high of 1.9 million mt in December.
However, fuel oil apparent demand slumped 11% to 33.8 million mt over 2014, compared with the 2.2% contraction experienced in 2013.
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.