China oil demand growth to accelerate this year on improved economy:
analysts
Singapore (Platts)--7Jan2013/512 am EST/1012 GMT
China's oil demand growth this year will likely be higher than in 2012
on the back of better economic performance, analysts said Monday.
Apparent demand for oil is expected to grow by 4% to 6% year on year in
2013, versus 3% to 4% in 2012, according to the analyst forecasts.
Barclays is expecting oil demand to grow by 5% this year to around 10.4
million b/d, versus 3% expansion in 2012, said Sijin Cheng, a
China-focused commodities analyst with the bank.
"In terms of growth trajectory, China seems to be recovering. But we are
not forecasting a really sharp rebound yet as we're still watching for
more aggressive stimulus measures to be announced," she said.
Cheng said any significant stimulus measures being planned in China
will likely only be announced in March, after the National People's
Congress meeting. That is when the Chinese government leadership
transition will also officially occur.
"Therefore I think we would likely see more rapid growth in the second
half rather than the first half of this year," Cheng said.
Chinese investment bank China International Capital Corp. estimates
overall demand this year will rise 4.7% year on year to 10.86 million
b/d, up from 3.4% growth in 2012, said Janet Kong, managing director of
its research division.
"China's oil demand performance is still very notable and will continue
to boost growth in the non-OECD as well as globally," she said. "We
expect Chinese oil demand to grow by close to 500,000 b/d in 2013
compared with 340,000 b/d in 2012, mainly because of growth in the
economy."
CICC forecasts China's economic growth will reach 8.2% this year,
compared with 7.7% last year. Industrial production growth is also
expected to accelerate by one percentage point this year, which should
boost gasoil demand further, Kong said.
Gasoil is the largest component in China's oil product slate, although
apparent demand over January to November last year edged up only 1.4%
year on year to an average 3.47 million b/d, according to Platts
calculations.
Additionally, demand for naphtha will grow by 50,000 b/d this year as
the chemicals sector improves, according to CICC. Ethylene production
contracted for the first three quarters of 2012, partly because stocks
were high and demand was weak, Kong said.
Another 30,000 b/d of incremental demand will come from heavy oil
products -- such as asphalt -- used in construction and for
infrastructure projects, which should pick up in line with an improving
economy, she said.
FACTS Global Energy is forecasting oil demand will expand by 5.2% this
year to 10.44 million b/d, compared with 3.4% growth in 2012, said
analyst Alex Yap.
Credit Suisse analysts David Hewitt and Horace Tse are even more
bullish, predicting demand growth of 6.2% this year to 11.04 million
b/d. The duo said in a report on Friday that this compares with 4%
growth last year.
The bank is forecasting just 1.5% global oil demand growth this year.
China does not publish demand data so most analysts calculate apparent
oil demand by adding refinery throughput and net oil product imports.
From January to November last year, China's apparent oil demand rose
3.3% year on year to 438.48 million mt (9.59 million b/d), according to
Platts calculations.
Demand was boosted by a 3.2% increase in refinery throughput to 424.6
million mt (9.29 million b/d). Total net oil product imports over the
period rose 6.6% year on year to 13.87 million mt.
--Song Yen Ling,
yen_ling_song@platts.com
--Edited by Alisdair Bowles,
alisdair_bowles@platts.com
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