July crude imports rise after 2 months of declines

Source:Reuters-Global Times Published: 2018/8/8 17:33:40

Capped by weak demand from ‘teapot’ plants returning from maintenance

China's crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country's smaller independent "teapot" refineries.

Crude shipments came in at 36.02 million tons last month, or 8.48 million barrels per day (bpd), up from 8.18 million bpd a year ago, and just up on June's 8.36 million bpd, data from the General Administration of Customs showed.

However, July imports were still the third lowest so far this year.

The slight pick-up likely reflected some teapot plants returning from maintenance, while refining margins also improved thanks to higher domestic fuel prices, said James Gao of consultancy China Sublime Information Group.

But overall, independent plants had been under pressure from thinning margins since March following a new government tax regulation and near four-year high oil prices, with one plant having already declared bankruptcy.

Independent refiner Shandong Haiyou Petrochemical Group filed for bankruptcy in late July and its crude processing units have been shut indefinitely.

State-owned refineries, however, are maintaining robust refining margins as they dominate the retail market and have fuel export quotas, as competition from teapots wanes.

China's largest refiner Sinopec Corp is due to deliver its best quarterly result since 2013 later this month, thanks to a robust refining business and a rebound in oil prices.

Rival PetroChina expects its first-half profits to more than double from the year-ago period.

For the first seven months, China took in 260.83 million tons, or 8.98 million bpd of crude oil, up 5.6 percent from a year earlier.

China's refined products exports last month were 4.57 million tons, nearly flat from a year earlier. Fuel imports rose 14 percent year-on-year at 2.67 million tons.

Total natural gas imports - including pipeline gas and liquefied natural gas - rose to 7.38 million tons, up 28.3 percent from a year ago, customs said.

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