China Imports Record Crude as Price Crash Accelerates Buying

[onebyone]

By

JENNYW. HSU

HONG KONG-- China's crude imports surged in December, underscoring the country's strong appetite for crude as it continues to fill its strategic petroleum reserves and as local refiners take advantage of cheap oil.

China imported 33.19 million tons of oil in December, 9.3% higher than a year before, the General Administration of Customs said Wednesday. That was a rise from the month before when it imported 27.3 million tons.

"This reinforces my view that China will continue to be a strong consumer of crude despite the market fear. Crude demand will stay on an uptrend as the economy is still expected to grow by at least 6%," said Barnabas Gan, a commodity analyst at OCBC.

As part of its ongoing energy reforms, Beijing has been allowing more small and privately-owned refiners, known as "teapots", to import crude directly from foreign sources. China imported 335.50 million barrels of crude in 2015, up 8.8% from 2014.

Platts China Oil Analytics projects China's crude demand growth will slow to over 6% on-year this year, driven by a deceleration in the Chinese economy.

Recent volatility in the Chinese stock market has spooked some oil traders who expect China's crude demand to falter. Global prices have fallen nearly 20% since the start of the year.

"Yes, the Chinese economy is in low gear. That is a fact, but it is definitely not over the cliff," said Kang Wu, the managing director of Beijing for FGE Consultancy, who expects China's crude demand to slow but remain healthy in 2016.

Reflecting China's increase in fuel exports in recent months, China's imports of refined oil products dropped 11% on year to 2.84 million tons in December, according to official data. In 2015, China's total imports of refined oil products fell 0.3% to 29.90 million tons.

With consumption weak at home, Chinese refiners have been exporting more. China exported 250,000 tons of crude in December, up 4.2% from a year earlier. In 2015, China exported 2.87 million tons of crude, a rise of 377% from the year before.

China also exported 4.32 million tons of oil products in December, a 53% on-year surge. In 2015, China exported 36.15 million tons of oil products, up 22% on-year.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

China's oil imports jump 9.3% in December - MarketWatch

Published: Jan 13, 2016 2:45 a.m. ET



By

JENNYW. HSU

HONG KONG-- China's crude imports surged in December, underscoring the country's strong appetite for crude as it continues to fill its strategic petroleum reserves and as local refiners take advantage of cheap oil.

China imported 33.19 million tons of oil in December, 9.3% higher than a year before, the General Administration of Customs said Wednesday. That was a rise from the month before when it imported 27.3 million tons.

"This reinforces my view that China will continue to be a strong consumer of crude despite the market fear. Crude demand will stay on an uptrend as the economy is still expected to grow by at least 6%," said Barnabas Gan, a commodity analyst at OCBC.

As part of its ongoing energy reforms, Beijing has been allowing more small and privately-owned refiners, known as "teapots", to import crude directly from foreign sources. China imported 335.50 million barrels of crude in 2015, up 8.8% from 2014.

Platts China Oil Analytics projects China's crude demand growth will slow to over 6% on-year this year, driven by a deceleration in the Chinese economy.

Recent volatility in the Chinese stock market has spooked some oil traders who expect China's crude demand to falter. Global prices have fallen nearly 20% since the start of the year.

"Yes, the Chinese economy is in low gear. That is a fact, but it is definitely not over the cliff," said Kang Wu, the managing director of Beijing for FGE Consultancy, who expects China's crude demand to slow but remain healthy in 2016.

Reflecting China's increase in fuel exports in recent months, China's imports of refined oil products dropped 11% on year to 2.84 million tons in December, according to official data. In 2015, China's total imports of refined oil products fell 0.3% to 29.90 million tons.

With consumption weak at home, Chinese refiners have been exporting more. China exported 250,000 tons of crude in December, up 4.2% from a year earlier. In 2015, China exported 2.87 million tons of crude, a rise of 377% from the year before.

China also exported 4.32 million tons of oil products in December, a 53% on-year surge. In 2015, China exported 36.15 million tons of oil products, up 22% on-year.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

 

[onebyone]

Amid global price rout, China crude oil imports hit record
BEIJING | BY ADAM ROSE AND CHEN AIZHU
China's crude oil imports hit a record 7.82 million barrels a day (bpd) in December, customs data showed, as the world's No.2 oil consumer took advantage of low crude prices to fill strategic reserves, but also increased its exports of refined fuels to an all-time high.

Crude imports for December were 33.19 million tonnes, up 21.4 percent on the month and 9.3 percent on the year, well above earlier estimates by Thomson Reuters Oil Research and Forecasts.

The December import figures may mean China challenges the United States to be the world's top importer of crude, although the U.S. Energy Information Administration has yet to provide its December data. Chinese monthly imports surpassed U.S. imports once, in April 2015.

China shipped in 335.5 million tonnes of crude oil for the year, the data showed on Wednesday. That was up 8.8 percent, or roughly 542,600 bpd, to 6.71 million bpd - also a new record.

Wu Kang, Beijing-based vice chairman of FGE Asia, said the two driving factors behind growth in 2015 were new demand from small, independent "teapot" refineries who gained the right to use imported crude oil in the latter part of the year, and stockbuilding in strategic reserves and commercial storage.

Nearly 20 small refiners have been granted quotas to use imported oil or import oil directly themselves.

China seized the chance to add up to 147 million barrels to its reserves in the first eleven months of 2015, according to Reuters calculations, following a more than 50 percent slump in oil prices LCOc1 since mid-2014.

China said it more than doubled the size of its strategic crude oil reserves between November 2014 and the middle of last year, building inventories at a rate exceeding analyst estimates of the country's stockbuilding.

Industry experts said Chinese firms could expand purchases possibly even more this year, as new tanks become available.

"2016 might be more interesting as the two driving factors are set to become more powerful as the government relaxed control both on crude imports as well as fuel exports, at a pace faster than thought," Wu said.

Demand for crude oil could rise 4.9 percent in 2016, the country's petroleum industry association said on Tuesday.

Even so, with waning economic growth, growth in demand for gasoline was moderate last autumn and appetite for diesel has fallen, putting oil demand - refinery throughput plus net imports of fuels - down 2.5 percent in November.

Fuel exports have risen as a result, hitting a record 4.32 million tonnes in December, or 975,500 bpd, up 5.4 percent over the previous month. Exports marked a record 693,300 bpd in 2015, up 21.9 percent.

Net fuel exports were 1.48 million tonnes in December.

China has allowed independent refineries to export fuel for the first time, having granted an estimated 440,000 tonnes of quotas under the first batch release.

(This version of the story corrects paragraph 13 to show comparison is with previous month, not with December 2014)



(Reporting by Adam Rose and Chen Aizhu; Editing by Joseph Radford)
Amid global price rout, China crude oil imports hit record| Reuters

China Imports Record Crude as Price Crash Accelerates Buying

Bloomberg News
January 13, 2016 — 9:22 AM ICTUpdated on January 13, 2016 — 12:08 PM ICT

• Crude imports gain 8.8% to record 334 million tons last year
• Product exports surge to record in December; rise 22% in 2015

China imported a record amount of crude last year as oil’s lowest annual average price in more than a decade spurred stockpiling and boosted demand from independent refiners.

The world’s largest energy consumer increased imports last year by 8.8 percent to a record 334 million metric tons, or about 6.7 million barrels a day, according to preliminary data released by the Beijing-based General Administration of Customs on Wednesday. Inbound shipments in December jumped to 33.19 million tons, while oil product exports rose to 4.32 million metric tons, both also records.

China has exploited a plunge in crude prices by easing rules to allow private refiners, known as teapots, to import crude and by boosting shipments to fill emergency stockpiles. The nation’s overseas purchases may rise to 370 million metric tons this year, surpassing estimated U.S. imports of about 363 million tons, according to Li Li, a research director with ICIS China, an industry researcher.


“China’s crude appetite will continue to be driven by a boom in teapot imports this year and the filling of strategic reserve sites amid multi-year low prices,” Li Li said by phone from Guangzhou. “In the meantime, U.S. dependency on oil imports will gradually decline with higher domestic output.”

China may start four additional strategic petroleum reserves this year as part of a plan to stockpile enough oil to cover 100 days worth of net imports by 2020 and thirteen independent refiners have been granted import quotas totaling a combined 55 million tons, or 18 percent of the nation’s annual imports.

December Imports
The nation’s crude imports last month was equivalent to 7.85 million barrels a day, 6 percent higher than the previous record of 7.4 million in April, Bloomberg calculations show. Oil shipments typically increase near year-end as refineries fulfill import targets and build stockpiles for use during Chinese New Year, which will fall in February this year, according to Amy Sun, an analyst with ICIS China.

Chinese refiners have been flooding regional markets with diesel as they raised crude processing to meet gasoline demand, leading to swelling stockpiles. Distillate exports surged 61 percent in the first 11 months in 2015 from a year ago, according to customs data.


The nation more than doubled its first-batch of 2016 fuel-export quotas to 20.93 million tons to alleviate domestic oversupply, ICIS China said on Jan. 6.

China Imports Record Crude as Price Crash Accelerates Buying - Bloomberg Business

 

[Nan Yang]

China is also importing iron ore and copper in record volume.
China's Iron Ore Imports Surge to Record as Prices Hammered - Bloomberg Business

Copper Higher After Strong Import Data From China - NASDAQ.com

 

[Nuptzx]

Very good sign. While the "prophets of chaos" continues their advertising campaign, the Chinese economy remains strong.