China’s June crude oil imports near 4-year low as lockdowns hit demand

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SINGAPORE — China’s daily crude oil imports in June sank to their lowest since July 2018, as refiners anticipated COVID-19 lockdown measures 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.

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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 Angola and Saudi Arabia 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, the lowest monthly volume since January 2017.

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First-half exports were down 41% compared with the same time a year ago at 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.

Natural gas imports, via pipelines and as liquefied natural gas (LNG), last month were 8.72 million tones, down nearly 15% from last year, as Chinese importers have cut spot purchases of LNG because of high prices.

Imports for the first six months fell 10% to 53.57 million tonnes. (tonne = 7.3 barrels for crude oil)

(Reporting by Chen Aizhu and Muyu Xu; editing by Jason Neely, Andrew Heavens and Barbara Lewis)

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