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China’s March crude oil imports climbed from a month earlier to the second highest on record, calculated on a daily basis, as refiners replenished stocks on generous government quotas and ahead of peak maintenance season.
March shipments came in at 39.17 million tonnes, or 9.22 million barrels per day (bpd), the General Administration of Customs said on Friday. That compared with 8.41 million bpd in February, and January’s record 9.57 million bpd.
Imports for the first quarter grew 7 percent from a year ago to 112.07 million tonnes, or about 9.09 million bpd. That marked an increase of nearly 595,000 bpd on average compared with the same period in 2017.
The first-quarter growth was fueled by higher government quotas for independent plants. But a new tax regulation targeted at small refiners and blenders, as well as planned plant overhauls, is seen capping buying for April and May.
“Independents remain the largest contributors to the imports growth. We estimate their imports expanded at 30 percent in the first quarter,” said Seng Yick Tee of consultancy SIA Energy.
The commissioning of the expanded East Siberia Pacific Ocean (ESPO) pipeline, PetroChina’s newly commissioned Yunnan refinery and CNOOC’s new Huizhou plant also contributed growth, Tee added.
At least three large state-run refineries have kicked off major maintenance that will last 40-60 days between April and May.
The three plants – Sinopec’s Zhenhai and PetroChina’s Sichuan and Jilin – have a combined daily processing capacity of 860,000 bpd and will reduce China’s imports from Saudi Arabia, Kazakhstan and Russia.
Four independent refineries with a combined capacity of 200,000 bpd also started maintenance this month. Analysts said that was in part triggered by a new consumption tax regulation as crude oil prices have risen.
Friday’s customs data also showed China’s March refined fuel exports shot to a new high at 6.69 million tonnes, 43 percent higher than the same month a year earlier. Imports only inched up 2 percent at 2.76 million tonnes.
State refiners have stepped up exports to help cope with a growing surplus of refined barrels. In one example, Sinopec is lining up its third very large crude carrier (VLCC) shipment of diesel from China to Europe or West Africa, people familiar with the matter said.
“Even in large shipments exports are not profitable, but it helped bolster domestic margins,” said one official with a state-run refiner who declined to be identified because he wasn’t authorised to discuss the matter with media.
(Tonne = 7.3 barrels for crude oil)
(Reporting by Chen Aizhu Editing by Kenneth Maxwell)