China oil demand fell 2.3% in september versus a year ago

Oct 23, 2013 12:00 AM

China's apparent oil demand* in September fell by 2.3% to an average 9.66 million barrels per day (b/d) or 39.55 million metric tons (mt) versus year-ago data, according to a Platts analysis of Chinese government data.

This marks the first time that China’s apparent oil demand showed a contraction since August 2012 and follows a year-over-year rise of 5.3% in August to an average 9.42 million b/d or 39.82 million mt. However, on a month-over-month basis China’s apparent oil demand in September rose 2.6% from August.

“Despite the year-over-year decline, there could likely be an uptick in apparent demand in the fourth quarter, when oil consumption is typically at its strongest because of winter demand,” said Song Yen Ling, Platts senior writer for China.

Lower refinery throughput volumes as well as lower net oil product imports caused apparent oil demand to contract last month.

Refinery throughput dipped 1.2% year over year to an average 9.44 million b/d, according to data released by the National Bureau of Statistics on October 18. Total net oil product imports, as reported by the General Administration of Customs on October 10, fell 34% from a year earlier to 900,000 mt.

China’s gross domestic product (GDP) grew by 7.8% in the third quarter, improving from 7.5% in the second quarter.

China’s apparent demand for gasoline fell for the first time in more than two years in September, dipping 0.7% year on year to 7.38 million mt. This was reflected in exports of the fuel, which surged 48.3% year on year to 430,000 mt even though domestic production rose 1.1% to 7.81 million mt compared with a year ago.

Apparent demand for gasoil, which accounts for the largest proportion of all oil products, contracted by 0.9% year on year in September to 13.87 million mt. This reversed three prior months of positive growth. Gasoil production fell 1.7% year on year to 13.93 million mt while exports dived 64.7% to 60,000 mt in September. China did not import any gasoil for the month.

“Although widely used in transport, gasoil is also a key barometer of industrial activity in China, so the year-over-year decline could indicate slowed industrial growth,” noted Song.

Fuel oil apparent demand fell 22.8% in September versus a year ago, dragged down by a 7.2% year on year decline in domestic output to 1.91 million mt. Net imports totaled 720,000 mt in September, falling 46.7% year on year. Demand for imported fuel oil from independent teapot refiners along China’s eastern coast fell in September, as more procured crude oil to run in their units. These refiners are able to crack both straight-run fuel oil and crude, depending on availability of feedstock.

China’s air traffic in September rose 9.7% year on year to 5.91 billion mt-kilometers and much of this extra demand was likely absorbed by increased jet/kerosene production, which rose 12.8% year on year to 2.24 million mt. Exports however, surged 67.9% year on year to a record 890,000 mt, while imports fell 10.9% to 410,000 mt, resulting in net exports of 480,000 mt.

For the first three quarters of the year, China’s apparent oil demand averaged 9.8 million b/d, a 3.9% rise versus the prior year. In 2012, apparent demand for the period showed a rise of 1.5% versus 2011.

MONTHLY TRADE DATA:


Sep '13 Aug '12 % Chg Aug '13 Jul '13 Jun '13 May '13
Net crude imports (million mt) 25.61 19.88 28.8 21.22 25.94 22.14 23.84
Crude production (million mt) 16.88 17.13 -1.5 17.30 17.17 17.44 17.73
Apparent demand* (million mt) 39.55 40.48
-2.3 39.82 41.52 40.89 40.31
Apparent demand* ('000 b/d) 9,663 9,891 -2.3 9,416 9,817 9,991 9,531

 

Sources: China’s General Administration of Customs, National Bureau of Statistics, Platts

Month-to-month demand in China is generally viewed as subject to short-term anomalies which are of interest and important to note, but which often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.

*Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese (NBS) customs. Platts also takes into account undeclared revisions in NBS historical data.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.

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