Platts Report: China's May Oil Demand Robust at 9.31 Mil b/d, But Inventories Rising
SINGAPORE, June 22, 2011 /PRNewswire/ -- China's apparent oil demand* in May reached 39.4 million metric tons (mt) or an average of 9.31 million barrels per day (b/d), which was 8% higher year on year, as state-owned enterprises continued to increase output to meet local market supply needs, according to a Platts analysis based on recent statistics released by the Chinese government.
Still, May's apparent oil demand was lower than April's oil demand at 9.37 million b/d. It was also the second consecutive month of single-digit demand growth following the October 2010 to March 2011 period of monthly demand growth in excess of 10%.
"China's crude oil imports and refinery throughput continued to grow last month, albeit at a slower pace," said Calvin Lee, Platts senior writer, China. "More importantly, demand appears to have dropped another notch last month, contributing to rising inventories."
Chinese refiners processed a combined 38.47 million mt of crude oil in May, or an average of 9.1 million b/d, equating to a 7.5% increase year over year.
Tasked by the central government to maintain adequate supplies of refined products in the local markets, domestic refineries continued to run at a rapid pace last month in a bid to prevent any oil shortages in the country. Yet, May's throughput was only marginally higher than April's crude runs at 9.09 million b/d.
With China refineries experiencing very low or negative margins, the Chinese companies are not well motivated to process more crude to meet the potential diesel demand surge, industry consultancy FACTS Global Energy said in a brief earlier this month.
In the meantime, net product imports last month were only 930,000 mt, or an average of 0.21 million b/d. Thus, net imports in May were the lowest this year, reflecting the fact that Chinese companies' appetite for imports has ebbed due to high prices in the global markets.
According to an estimate released earlier this month by the National Development and Reform Commission (NDRC), China's consumption of refined products in May grew 5.2% year on year to 20.19 million mt. But consumption was down 28,000 mt from April.
Coupled with increased production, the May drop in consumption helped to boost inventories and oil product stocks at month's close were one million mt greater than a year ago, the country's top economic planning agency said in its monthly industry report.
A month ago, NDRC reported that consumption of oil products in April grew at a faster pace of 8.3% year over year to 20.4 million mt. Oil product inventories at the end of April were 450,000 mt more than a year earlier.
In a separate report earlier this month, the NDRC said China's state-owned oil majors Sinopec and PetroChina held in storage by late May more than 13 million mt of refined products, a level which the NDRC termed as a "reasonable level."
"A recent supply crunch appears to have dissipated for now. But it could be a different story if power shortages worsen, forcing industrial users to fall back on diesel power generators, and peak summer demand for transportation fuels cause another tightening in supply," Lee said.
MONTHLY TRADE DATA IN MILLION METRIC TONS:
May'11 |
May'10 |
%Chg |
Apr'11 |
Mar'11 |
Feb'11 |
Jan'11 |
||
Net crude imports |
21.50 |
17.65 |
+21.81 |
21.25 |
21.33 |
19.87 |
21.52 |
|
Crude production |
17.43 |
17.16 |
+1.57 |
16.96 |
17.58 |
15.90 |
17.81 |
|
Apparent demand |
39.40 |
36.48 |
+8.00 |
38.36 |
38.96 |
36.65 |
38.90 |
|
*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 customs.
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.
Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.
For more information on crude oil, visit the Platts website at www.platts.com. For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.
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SOURCE Platts
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