China's Crude Oil Imports Slump as Fuel Glut Slows Refiners

  • Overseas crude deliveries in January slide almost 20% on month
  • Net oil product exports tumble to lowest in seven months

China’s crude imports fell from a record to the lowest in three months and net oil product exports tumbled as state refiners slowed operations amid swelling stockpiles of fuel.

The world’s largest energy consumer in January cut imports by 4.6 percent from a year earlier to 26.69 million metric tons, or about 6.3 million barrels a day, according to data released by the Beijing-based General Administration of Customs on Monday. Inbound crude shipments are almost 20 percent lower than December’s record and the least since October, Bloomberg calculations show. Oil product net exports fell 76 percent to 350,000 tons, a seven-month low.

Imports may continue to slide this month while the country returns from last week’s Lunar New Year holiday, when it essentially shuts down for a week. The country’s total exports declined 11.2 percent in January in U.S. dollar terms from a year earlier, while imports tumbled 18.8 percent, adding to economic challenges confronting the world’s biggest trading nation.

“Inbound shipment won’t likely pick up its pace until fuel demand recovers after the Chinese New Year holiday,” Amy Sun, an analyst with ICIS China, said by phone from Guangzhou. “China’s crude imports are expected to ease following the very high level in December as commercial oil stockpiles are quite full now.”

Slower Refining

Gasoline inventories in December increased to the most since Aug. 2014 while diesel and kerosene supplies were at three-month highs, according to data compiled by Bloomberg.

Major refineries reduced operating rates to about 77 percent of capacity last month from almost 79 percent in December, according to Shandong-based China Petroleum & Chemical Corp., Asia’s largest refiner, plans to lower its oil-processing target by 1.2 percent this year because of weak demand and competition from independent refiners, people with knowledge of the matter said last month.

Net oil product exports last month declined to the lowest since June, with exports at 3.01 million tons compared to imports at 2.66 million tons. Chinese refiners have flooded the regional market with diesel as they raised crude processing to meet gasoline demand, leading to swelling stockpiles. Coal imports fell 9.2 percent from a year earlier to 15.23 million tons, the lowest since October.

— With assistance by Jing Yang

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