China, the world’s second-biggest oil consumer, increased net crude-oil imports to a record in June as demand rose and costs fell.
Net purchases climbed to 22.14 million metric tons, or about 5.39 million barrels a day, from 17.65 million tons a month earlier, according to preliminary data released by the General Administration of Customs today. This was more than the previous record of 20.98 million tons in April.
Oil-product demand rises in China between July and September on summer demand for fuels including gasoline and diesel. The country is also increasing purchases to take advantage of lower costs than in May, said Qiu Xiaofeng, chief oil analyst with China Merchants Securities Ltd.
“State refineries would have increased crude purchases as oil costs dropped, also after they reduced imports quite a bit in May,” Qiu said by mobile phone in Shanghai today, “We don’t think the crude imports will sustain such strong growth in the second half as demand is poised to be hurt by the cooling economy.”
China paid an average $77.20 for each barrel of crude in June, down from $82.50 a barrel in May, according to Bloomberg calculations. May purchases dropped 16 percent from April to a four-month low of 17.84 million tons.
Purchases of crude oil in the first half rose 30 percent from a year earlier to 117.97 million tons, according to today’s data.
The country may also boost imports for stockpiling, said Standard Chartered Bank commodity analyst Judy Zhu. “Crude oil imports remained robust by rising 34 percent year-on-year, in line with our expectation that China will remain active in the global crude-oil market to feed its state oil reserves this year,” Zhu said in an e-mailed note today.
China last year started building storage tanks of crude reserve in a second phase development. The first phase holds the equivalent of about 16.4 million cubic meters of oil, or about 30 days of net imports, the nation’s top energy administration said last June.
China’s passenger-car sales to dealerships rose at the slowest pace in 15 months in June, adding to signs that the world’s third-largest economy is cooling. June power consumption growth eased “sharply” on a high comparison base last year and as demand from heavy industries showed signs of slowing, Shanghai Securities News said July 5, citing energy authorities it didn’t name. Demand growth in July and August may also slow “significantly,” the newspaper said.
Imports of oil products including gasoline and diesel reached 3.31 million tons, compared with 3.18 million tons in May, while exports totaled 2.15 million tons, from 2.69 million tons. The nation was a net importer of oil products last month.
The world’s biggest producer of coal exported 1.27 million tons of the fuel last month. The customs department didn’t provide coal import numbers in today’s release.