China imported the equivalent of around 7.77 million barrels of oil a day in August, the highest crude import trend since April this year, on the back of declining domestic production and increased demand from small refineries, according to data by the General Administration of Customs.
China’s oil imports rose by some 1.5 million bpd compared to August last year, also buoyed by higher demand from the independent refineries, the so-called teapots, which hasten to cash in on low crude prices ahead of import quotas expiry in December, according to Forbes.
“China’s oil producers won’t resume production at some high-cost oil fields at current crude prices, so imports will remain quite strong,” Tian Miao, an analyst with North Square Blue Oak Ltd., said for Bloomberg, commenting on yet another reason for the higher imports.
Also in August, China’s coal imports soared to 26.6 million tons, their highest since December 2014, as domestic coal production has slumped following government efforts to reduce pollution. Between January and July of this year, the Chinese crude production dropped by 5.1 percent while coal mining slowed by 10 percent.
In July, China’s crude imports stood at about 7.35 million barrels a day, the slowest import trend since January. One of the reasons for the lower imports than in previous months was the slower demand by teapots, as some have slowed with maintenance and others have filled up, Amy Sun, an analyst with ICIS China, told Bloomberg.
Related: What Drove The 2016 Oil Price Rise?
In the first half of 2016, China’s crude oil imports rose 14.2 percent on the year, alongside import increases of other commodities such as iron ore and copper, with their prices remaining low, the customs administration has said.
Between January and April of this year, China’s oil imports had been growing steadily, and in April, for example, the country imported 32.58 million metric tons of crude oil which equals 7.96 million barrels a day, up 3.2 percent from the previous month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.