China is net exporter of oil products in October

 

Singapore (Platts)--10Nov2014/1216 am EST/516 GMT

China's crude oil imports in October were up 18% from the same month last year to 24.09 million mt, or an average 5.7 million b/d, preliminary data from the General Administration of Customs showed Saturday, November 8.

The volume, however, fell 15.4% month on month.

The elevated year-on-year growth rate last month was against a low base in October 2013, when China's crude inflows had slumped to a 14-month low of 4.83 million b/d.

China did not export any crude in October.

Over January to October, China's total crude imports rose 9.2% year on year to 252.6 million mt, averaging 6.09 million b/d. This is the highest rate of year-on-year growth for the 10-month period since 2010, when expansion was 19.5%.

LARGEST LEVEL OF NET OIL PRODUCT EXPORTS TO DATE

Meanwhile, China's October oil product imports slid 22.2% from a year earlier to 2.28 million mt, while oil product exports jumped 30.3% over the same period to 3.14 million mt.

This means China was once again a net oil products exporter last month. At 860,000 mt, this was the highest level of net exports on record.

China has flipflopped between being a net oil product importer and net exporter this year, and October was the fifth month of net exports.

Between January and October, China's oil product inflows declined by 26.9% to 24.41 million mt, while oil product exports were the exact same volume, although they edged up 2.7% from the same period of 2013.

This means China has turned from a historical net importer to becoming balanced in oil products, although if oil product exports were to continue outpacing imports in the next two months, China could for the first time become an overall net exporter of products in 2014.

This is a result of a surplus in refining capacity following rapid expansion in recent years, while consumption of key fuels such as gasoil and fuel oil has slipped.

In contrast, China's oil product imports were nearly 40% higher than its oil product outflows during 2013, while they were 64% higher in 2012.

The data released Saturday also showed that China's fuel oil imports, listed as No. 5-7 fuel oil by customs, tumbled 31.1% year on year in October to 1.15 million mt. Year-to-date inflows fell 26.9% year on year to 14.54 million mt.

Fuel oil demand in China is witnessing structural decline because of lower consumption by the country's independent refiners, known locally as "teapot" refineries, which have started using more crude oil and a bitumen-blend feedstock known as asphalt in the last two years.

Fuel oil now accounts for a fifth of the teapot refiners' overall cracking feedstock, compared with about 40% during the first half of 2013.

--Song Yen Ling, yenling.song@platts.com
--Edited by Geetha Narayanasamy, geetha.narayanasamy@platts.com

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