China crude oil imports shatter record, top US intake
BEIJING (Reuters) -- China's crude oil imports surged to an all-time high in March to nearly 9.2 MMbpd, customs data showed on Thursday, far surpassing expectations and overtaking the United States as independent refiners ramped up their purchases.
The March imports came in at 38.95 MMt, or 9.17 MMbpd, according to the General Customs Administration. That compared with 8.286 MMbpd in February and far exceeded an earlier record of 8.57 MMbpd in December.
Both the March and the first-quarter import levels were above those of the United States according to data from the US Energy Information Administration (EIA), making China the world's top crude oil buyer so far this year.
The shipments were in part driven by independent oil refiners' rush to purchase oil after they received fresh 2017 quotas around mid-January.
"This rush of buying were mostly for March arriving cargoes. In our case, the amount of crude oil we bought for March exceeded the total for the first two months," said a trading manager with Shandong Dongming Petrochemical Group, the country's largest independent oil processor.
Last year, most of China's more than 900,000 bpd increase in its crude oil imports was due to independent refiners that had newly received permits for bringing in shipments.
China last week also granted crude import quotas to newly qualified independent refiners to purchase from the international market for the first time.
"The 9.2 MMbpd of crude imports is definitely a shocking number. That means China built close to 1.7 MMbpd of crude inventory in March, way off the chart from any perspective," said Harry Liu, an analyst with consultancy IHS Markit.
Still, IHS expected a sharp drop to around 8 MMbpd in coming months as seasonal refinery maintenance picks up, and as available storage tank space dwindled, said Liu.
PACE TO SLOW
Many of China's key state refineries are entering maintenance in the second quarter, such as Sinopec's Shanghai and Yangzi refineries and PetroChina's Dalian refinery.
China's crude oil imports for the first quarter grew 15% over the same period a year ago to 104.73 million tonnes, or about 8.49 MMbpd.
US crude imports were at 7.97 MMbpd in March and 8.17 MMbpd in the first quarter, according to Reuters calculations based on EIA data.
There was likely an element of catch-up in the Chinese data, with North Sea crudes bought in December and January finally making their way into the numbers and US crudes exported in February showing up as late-March arrivals, said Virendra Chauhan, Singapore-based analyst at Energy Aspects.
The customs data also showed that China's March refined fuel imports were up 10.2% on year at 2.7 MMt, while exports for the month rose nearly a quarter on year at 4.67 MMt.
China slashed a second batch of fuel export quotas for 2017 by 73% versus the first around for the year, under so called processing trade terms, potentially leading to slowing exports in coming months.
Any drop, however, could be partly offset by rising shipments overseas under a separate, general trade category in which the government allotted 1.31 MMt of exports quotas, mostly for gasoline and diesel.
Reporting by Chen Aizhu and Meng Meng; Additional reporting by Florence Tan in Singapore; Editing by Tom Hogue
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