--Clyde Russell is a Reuters market analyst. The views
expressed are his own.--
By Clyde Russell
LAUNCESTON, Australia, Jan 13 China's record
crude oil imports in December were an impressive way to end the
year, but they were far from enough to outweigh soft growth for
2013 as a whole.
Crude imports were 6.31 million barrels per day (bpd) last
month, boosted 10.1 percent over November's 5.73 million bpd as
two large refineries restarted operations after maintenance.
But overall crude imports for last year were 5.64 million
bpd, a gain of 4 percent over 2012, well down from the 6.8
percent increase in 2012 from 2011.
The weakness in crude import growth is further underlined by
looking at the fall in net imports of refined products.
China's net crude imports for 2013 were 5.61 million bpd, as
the country does export small amounts of oil. That was a gain
from 2012 of about 250,000 bpd.
Net product imports dropped to 221,600 bpd last year, a loss
of 84,000 bpd from 2012.
The change in net fuel imports was driven almost entirely by
higher exports, with outbound product shipments rising to about
570,000 bpd from 2012's 484,000 bpd, while product imports were
Taken together, net crude and fuel imports last year were
5.83 million bpd, up about 160,000 bpd, or 2.8 percent, from
2012's 5.67 million bpd.
This figure is a truer reflection of the overall state of
Chinese import demand.
Put another way, while crude oil imports were about 230,000
bpd higher in 2013, exports of refined products rose about
This means the increase in crude imports to meet rising
domestic demand or for stockpiling was weaker than it may appear
at first glance.
This in turn suggests the Chinese economy is using fuel more
efficiently, as economic growth is likely to be around 7.6
percent for year to end-December, down only slightly from 7.9
percent in the previous year.
REFINED PRODUCT EXPORT SURGE
It's also interesting to look at the breakdown of the trade
in refined products.
Full-year figures are likely to be published next week, but
in the 11 months to end-November, China's exports of light
diesel were about 55,200 bpd, up from the 32,500 bpd over the
same period in 2012.
The real difference, though, was in diesel imports, which
fell to about 10,200 bpd in the first 11 months of 2013 from
about 30,500 bpd for the same period in 2012.
On a net basis, China exported about 45,000 bpd of diesel on
the year to November, against net exports in 2012 of a tiny
China imports virtually no gasoline, but exports surged to
109,000 bpd in the first 11 months of 2013 from about 57,000 bpd
in the same period in 2012.
The big import item is fuel oil, which is used as a
feedstock by smaller, private refiners. The significant thing to
note here is that for the first 11 months imports were largely
steady, with 2013 recording 443,000 bpd, down fractionally from
454,000 bpd for the same period in 2012.
This trend is likely to continue with more Chinese refining
capacity coming onstream in 2014 and a gradual shift toward
allowing private refiners to import crude rather than fuel oil.
Two major new refineries, PetroChina Co Ltd's
Sichuan and Sinochem Corp's Quanzhou, with
a combined capacity of 440,000 bpd, are also currently starting
up and should be fully operational in the first quarter of this
This means crude imports are likely to be higher in 2014,
but again the key factor to watch will be product exports.
Higher product exports should put pressure on Asian refining
margins, only it's far from certain that the extra refining
capacity will end up as product exports, as government permits
are still required.
Still, the current trend is clear: China has excess domestic
refining capacity and demand growth for crude oil appears to be
(Editing by Tom Hogue)