(EnergyAsia, September 25 2012, Tuesday) — China’s apparent oil demand fell 1.5% year-on-year in August to 37.87 million metric tons (mt), or 8.95 million b/d, the second monthly contraction this year, said US energy media Platts.
According to an analysis of recent Chinese government data, Platts said the August decline follows a 1.9% dip in June to 9 million b/d, although demand returned to positive growth of 2.4% at 9.2 million b/d in July.
Platts said China’s apparent demand in August was the lowest since September 2011 which was also at 8.95 million b/d.
The McGraw-Hill unit said the country’s apparent demand was likely dragged down by lower oil product imports, which fell 34.3% year on year to 2.24 million mt. With exports at 2.11 million mt for the month, net product imports were 130,000 mt in August, down nearly 90% year on year and the lowest since January 2010, when China was a net exporter of products.
“There is still an argument to be made that government incentives for growth are going to kick-in and we’ll see a rise in China’s consumption in the remaining months of the year,” said Song Yen Ling, Platts senior writer for China.
“With refineries coming out of maintenance and prices rising, we’re likely to see some improved refinery throughput rates due to higher refining margins.”
August refinery runs rose 1.5% year on year to 8.92 million b/d, according to data released by China’s National Bureau of Statistics on September 9. This was a slight uptick from July volumes of 8.89 million b/d and June levels of 8.79 million b/d.
The National Development and Reform Commission raised the retail price of gasoline by roughly 6.6% and diesel by 7.2% on September 11 – the second hike in two months and the fourth so far this year.
In China’s individual oil products markets, Platts said gasoil remains the weak link, with the apparent demand for the fuel contracting for the third month in a row.
“Gasoil consumption is the country’s biggest drag on total oil use, a manifestation of the slowing economy and the overall drop-off in industrial activity,” said Ms Song.
China consumes more gasoil than any other oil product.
Apparent demand for gasoil in August fell 1.4% year on year to 13.67 million mt, or 3.31 million b/d. In July, demand had fallen 1.3% year on year to 3.32 million b/d and 2.8% to 3.34 million b/d in June, demonstrating the weakened industrial sector.
Gasoil imports fell 68% year on year to 80,000 mt in August; exports fell 28.6% to 150,000 mt. Domestic gasoil production in refineries declined less than 1% year on year to 13.74 million mt.
Apparent demand for gasoline in August rose 8.1% year on year to 7.31 million mt (2 million b/d), driven by domestic output, which rose 5.8% to 2.05 million b/d. China is a net exporter of gasoline although total exports last month fell 46.7% year on year to 160,000 mt.
Platts said jet fuel/kerosene demand in August fell 8% year on year to 1.55 million mt, or 389,627 b/d. Exports surged 14% to 650,000 mt, while imports plunged 34% to 350,000 mt. Output rose 7.2% on year to 465,111 b/d.