China data: Nov oil product exports surge 68% to record high 4.1 mil mt


China's oil product exports surged 68% in November to a record high of 4.1 million mt as bleak domestic demand prompted refiners to actively push cargoes overseas in an effort to reduce bulging inventories.

The November exports are the highest since Platts started compiling data January 2005 and are likely the highest ever seen, as China was a net importer of oil products prior to 2005.

The exports were up 25% from 3.28 million mt in October.

State-owned refineries continued increasing exports to relieve the domestic surplus amid weak demand.

"The demand in domestic market was lower in December than that of November, and we have to rely on exports to cut the inventories," said a source with PetroChina's 12 million mt/year (240,000 b/d) Guangxi refinery.

The refinery planned to export a total of around 272,000 mt of oil products, up 2% from 266,000 mt exported in November.

Oil product demand weakened in November, after the traveling season and harvest season ended in October, and it is expected to fall further in December, sources said.

"China's exports of oil products in December are expected to be broadly the same as that of November, despite Sinopec refineries shutting for maintenance, as domestic demand remains weak," said James Lu, senior analyst from Platts China Oil Analytics.

Sinopec, which has around five refineries shutting units for maintenance in southern China over November-December, still has received quotas for a total of 700,000 mt of oil product exports in the latest round in mid-November, while PetroChina's new quotas mainly come from downward adjustments to previously awarded gasoil and naphtha quotas.

State-owned SinoChem received its first batch of export quotas for 200,000 mt of gasoline, 150,000 mt of gasoil and 100,000 mt of jet fuel.

The company planned to export its first 35,000-mt gasoline cargo from its 12 million mt/year Quanzhou refinery in southeast Fujian province in December.

The continuous hike in exports comes as Beijing allows teapot refiners to export more oil products, signaling that export volumes could rise in coming months unless domestic demand picks up.

The country's independent teapot refineries are also encouraged by the government for the first time to export oil product in 2016.

Six refineries that have both crude import quotas and import licenses are expected to export oil products next year, with total volumes around 3 million mt to 5 million mt of oil products, sources said.

The 7.5 million mt/year Dongming Petrochemical in Shandong, the largest teapot refiner, would apply for a quota of around 2 million mt next year for export.

The preliminary data released by the GAC does not give a breakdown by individual product, and the detailed November export data will be released by GAC in late December.

China exported 19.35 million mt of gasoline, gasoil and jet fuel over January-October, up 20.6% year on year, according to customs data.

Given total quotas allocated for 29.8 million mt of exports, that indicates that quotas for 10.45 million mt of exports were unused for November-December.

If all of those allocations are used before they expire at the end of the year, November-December exports will be up 204% from November-December 2014.


China's crude oil imports rose 7.6% year on year to 27.34 million mt in November, or 6.68 million b/d, according to preliminary data released Tuesday by the General Administration of Customs.

The November imports were up 7.2% from October, rebounding from a month-on-month drop of 8.8% in October.

However, the imports were lower than market observers' expectations. ChinaOil, the importing arm of state-owned oil giant PetroChina, alone purchased 76 crude cargoes of 500,000 barrels during the Platts Market on Close assessment process in August.

"Although the loading month was in October, not a lot of crude from the MOC trades had arrived in China due to the contango market structure," said Yen Ling Song, senior analyst from Platts China Oil Analytics.

China's crude imports over January-November rose 8.7% year on year to 302.31 million mt, averaging 6.63 million b/d, down slightly from 9% growth a year earlier.

China exported around 320,000 mt of crude in November, compared with none in November 2014.

Total crude exports of 2.61 million mt over January-November surged 625.4% year on year.

In the first 11 months of the year, net crude imports reached 299.7 million mt, averaging 6.58 million b/d, up 7.9% year on year.

As Chinese independent teapot refineries, which have been given both import quotas and import licenses, have been accelerating imports by year end, it is likely to see the imports in December rise slightly from November.

A total of around 10 million mt of crude is expected to be imported by seven teapot refineries by year's end since end-July, with around 4 million mt expected to arrive over November-December.


Oil product imports fell 20.7% year on year and were 7.4% from October at 1.88 million mt in November, the lowest since July 2014.

Over January-November, China's oil product imports amounted to 27.05 million mt, inching up 0.9% year on year.

Fuel oil imports -- classified by customs as No. 5-7 grade -- fell 25% from October and 35.2% year on year to 810,000 mt in November. Total fuel oil imports in the first 11 months fell 10.1% year on year to 14.21 million mt, the data showed.

China's fuel oil imports have been steadily falling as demand -- primarily from the country's teapot refineries -- has dried up following a 50% increase in the consumption tax on the fuel during Q4 2014.

Source from : Platts