China’s daily crude oil imports in July fell to their lowest since September 2022, Reuters records of customs data show, as weak processing margins and low fuel demand curbed operations at state-run and independent refineries.

The world’s largest crude oil buyer brought in 42.34 million metric tons in July, or about 9.97 million barrels per day(bpd), data from the General Administration of Customs showed.

Imports fell nearly 12% from the previous month and were 3% below the year-ago amount, according to Reuters’ records of customs figures.

Higher crude oil prices and weaker-than-expected domestic consumption of gasoline and diesel are squeezing refining profits.

Chinese consultancy Oilchem estimated independent refiners operated at 56.11% of capacity in July, which is the lowest in three years and down 7.3 percentage points versus a year earlier.

“There was little improvement in gasoline or diesel demand and the refining margins were lower than a year earlier,” Oilchem said in a research note on July 26.

Some refiners were incurring heavy losses. Two plants owned by state group Sinochem were shut “indefinitely” for maintenance to stem losses, Reuters has reported.

Faltering demand, particularly for diesel fuel, also capped state refiners’ throughput. Refining giant Sinopec Corp posted only 0.1% year-on-year growth in crude processing but a nearly 9% fall in diesel output during the first six months.

For the first seven months, crude oil imports totalled 317.8 million tons, or 10.89 million bpd, down 2.4% on the year in one of the few annual declines and the steepest fall since early 2023.

Traders said there was some additional crude oil buying in July destined for an east China storage base under a government mandate to stockpile for state reserves, but the volume was small.

Wednesday’s customs data also showed China’s natural gas imports rose last month to 10.86 million tons, bringing the year-to-date amount to 75.44 million tons, or 12.9% above the year-earlier levels.

Exports of refined oil products, which include diesel, gasoline, aviation fuel and marine fuel, were at 4.98 million tons for July, down from June’s 5.37 million tons.

Exports for the January-July period fell 4.1% on the year to 35.08 million tons.
Source: Reuters (Reporting by Chen Aizhu; Editing by Sonali Paul and Stephen Coates)