China’s daily crude oil imports in June sank to their lowest since July 2018, as refiners anticipated tough COVID-19 lockdown would curb demand, data showed on Wednesday.
The world’s top crude buyer imported 35.82 million tonnes last month, data from the General Administration of Customs showed, equivalent to 8.72 million barrels per day (bpd).
That’s 11% lower than a year ago and 19% below the 10.8 million bpd level in May.
Imports during the first half of the year fell 3% versus the same period last year to 252.5 million tonnes, or about 10.2 million bpd, as months of COVID control measures and the government’s curbs on fuel exports capped crude buying.
As refiners reduced imports in response to rigid mobility restrictions to contain the spread of the coronavirus, they especially avoided more costly supplies from countries such as Saudi Arabia and Angola and focused on cheaper Russian crude.
Chinese commodities consultancy JLC estimated that first-half imports by small independent refiners dropped by 30% year-on-year to 50.12 million tonnes, or about 2.02 million bpd.
“There will be some rebound in import demand in the third quarter as refiners crank up operations, but high oil prices will continue to curb overall purchases,” JLC said in a research note.
Wednesday’s data also showed refined oil product exports halved from a year-ago level to 3.21 million tonnes for June, with first-half exports down 41% on year to 21.6 million tonnes.
China issued quotas for another 5 million tonnes of refined fuel exports, just a month after a top-up of 4.5 million tonnes of permits, although the total releases so far this year are 40% below levels a year ago.
The new quotas should help to reduce high domestic inventories while helping refiners to cash in on robust export margins in a tight global market, traders said. (tonne = 7.3 barrels for crude oil)