China crude oil imports post first year-on-year decline since April

China’s crude oil imports in November fell 9.2% year-on-year, customs data showed on Thursday, in the first annual decline since April as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.

Crude oil arrivals last month totalled 42.445 million metric tons, or 10.33 million barrels per day (bpd), according to the General Administration of Customs, the lowest daily rate since July and down from 11.53 million bpd in October.

Year-to-date imports by the world’s largest oil buyer amounted to 515.65 million tons, or 11.27 million bpd, an increase of 12.1% from a year earlier.

High import levels through the year so far had left refiners with large onshore crude inventories at the start of the month, estimated at 958 million barrels as of Nov. 2, according to commodities consultancy Vortexa.

Despite price declines in key international crude benchmarks through November, independent “teapot” refiners in Shandong still had stiff competition for Russian cargoes as well as cargoes from Venezuela after U.S. sanctions on Caracas were relaxed, with buyers facing wide discrepancies in offer prices.

Weak macroeconomic indicators – most evident in the manufacturing and construction sectors – have continued to weigh on demand for products such as diesel and asphalt. China’s manufacturing PMI shrank for the second consecutive month in November, reflecting weakening confidence in government stimulus measures among factory managers.

Underscoring concerns over the real estate and construction sectors, ratings agency Moody’s on Tuesday put a downgrade warning on China’s credit rating, citing risks associated to the “ongoing downsizing of the property sector”.

Thursday’s customs data also showed refined fuel exports at 5.08 million tons versus October’s 5.17 million tons and down 17% compared with 6.14 million tons a year ago.
Regional refining margins DUB-SIN-REF rose through November, standing at $6.74 per barrel on Dec. 1, nearly double $3.60 per barrel a month earlier.

Data also showed imports of refined fuel reached 4.16 million tons, up one third from a year earlier, with the year-to-date volume soaring 87% to 43.23 million tons.

Robust imports of fuel oil by independent refiners to process as feedstock for higher-value diesel and gasoline contributed to the import expansion, traders said.

China’s natural gas imports, comprising both liquefied natural gas (LNG) and piped gas, rose 6% on the year to 10.95 million tons, highest since January 2022 and a sharp increase from 8.79 million tons in October as northern China entered winter heating season.
Source: Reuters (Reporting by Andrew Hayley and Chen Aizhu; Editing by Jacqueline Wong and Tom Hogue)