China’s crude oil imports fell 1.3% in the first two months of 2023 from a year earlier, data showed on Tuesday, but analysts pointed to accelerating imports in February as a sign that fuel demand was rebounding after Beijing scrapped COVID-19 controls.
Imports during January-February totalled 84.06 million tonnes, or about 10.40 million barrels per day (bpd), according to the General Administration of Customs. China imported 10.53 mln bpd in the same period last year.
Customs did not give a breakdown for the individual months, but analysts who track shipping data said China’s January imports were below year-earlier levels.
However they noted that state refiners in February stepped up imports of Middle Eastern crude because of lower official selling prices and bought steeply discounted Urals oil from Russia’s European ports.
State-owned refiners have increased purchases of cargoes for February delivery amid a positive domestic fuel demand outlook and relatively strong fuel exports, Refinitiv analysts wrote last week.
Independent refiners also raised their crude throughput during the two months, operating at 67.5% of capacity, which was 4.4 percentage points higher than a year earlier, according to Chinese commodities consultancy JLC.
Newly-launched refinery Jiangsu Shenghong Petrochemical and PetroChina’s Guangdong Petrochemical brought in cargoes as they gradually ramped up output, traders said.
A year ago, independent refiners were ordered to cut output to minimise air pollution during the Beijing Winter Olympics.
Demand for gasoline and aviation fuel has been expected to recover because people are travelling more since Beijing scrapped its COVID curbs in early December.
Data showed exports of refined oil products – which included diesel, gasoline, aviation fuel and marine fuel – soared 74.2% over a low base a year earlier to nearly 12.7 million tonnes following the government’s release of higher quotas.
Stronger-than-expected sales of aviation fuel and marine bunker fuel from bonded storages, also counted as exports, contributed to the surge, Vortexa Analytics’ China analyst Emma Li said.
Natural gas imports for January-February, including piped gas and liquefied natural gas (LNG), fell 9.4% from a year earlier to 17.93 million tonnes, the data showed.
For LNG, Refinitiv shiptracking data put China’s imports at 11.1 million tonnes, down 12.4% on official data of 12.68 million tonnes in the same period last year.
High spot LNG prices and tepid domestic demand when factories shut during the Lunar New Year holiday capped buying, traders said.
Source: Reuters (Additional reporting by Trixie Yap; Editing by Muralikumar Anantharaman, Jamie Freed and Sonali Paul)