Rise in crude oil imports slides to lowest this year

Updated: 2012-05-11 09:30

By Liu Yiyu (China Daily)

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Demand to weaken as country's economic growth slows, experts say

China's crude oil imports in April rose 3.3 percent year-on-year to 22.26 million tons, the lowest so far this year, according to data released on Thursday by the General Administration of Customs.

That's compared with 8.7 percent in March, 14.6 percent in February and 7.4 percent in January.

China's overall crude imports, however, have been up. Over the first four months of the year, total crude imports were 92.87 million tons, up 9.3 percent year-on-year, customs data showed.

China halved its crude imports from Iran in March compared with a year earlier because of a dispute over contract terms, after cutting the imports by 5 percent in January and 40 percent in February.

Customs data also showed that China's crude exports in April fell 82.8 percent year-on-year to 50,000 tons.

Industry analysts said that downstream demand for refined oil is unlikely to be promising.

As China's economic growth slows, oil demand from infrastructure projects, mining, transportation and industrial users weakens, according to a research note by China International Capital Corp.

This, combined with high oil prices, led to weak demand for refined oil, especially diesel.

Since April, China's gasoline and diesel wholesale prices have dropped by 1 percent and 2 percent respectively, the CICC report said.

China's dependence on oil imports increased to 56.7 percent in 2011, according to the latest report released by the Ministry of Land and Resources on Thursday. The number has been increasing rapidly, at 3 percent year-on-year.

Oil product imports in April dropped 6.2 percent year-on-year to 3.02 million tons, while oil product exports fell 19 percent to 1.66 million tons, the data showed.

With gasoline and diesel inventories currently at historically high levels of 6.6 million tons and 11.9 million tons, the product market is still in the midst of reduction. However, weak downstream demand may, to some extent, hamper the reduction process, according to the CICC report.

China National Petroleum Corp, the country's largest oil producer, forecast earlier this year that China's annual refining capacity is expected to reach 700 million tons by 2015.

Its capacity this year is expected to hit 578 million tons, up 38.2 million tons from 2011.