China's record-high imports from earlier this year continued to slow down last month along with other commodity imports, as demand growth slackens.
The average amount of oil China imported in November stood at 11.04 million bpd, Reuters' Clyde Russell wrote today, noting it was more than a million bpd higher than the October average but slightly lower than the average for November 2019.
One reason for the monthly increase was a result of delayed shipments, Russell noted. Indeed, China's crude oil buying binge earlier this year resulted in record-high crude imports and weeks of delays at Chinese ports during which tankers had to wait to discharge the crude oil that refiners had snapped up in the spring when they took advantage of the lowest crude oil prices in nearly two decades.
Because of the record amounts of oil flowing into refineries and storage facilities, analysts warned that a slowdown is to be expected during the final quarter of the year, not least because independent refiners had used up their import quotas issued by the government. It was this factor that explained the dip in crude oil imports in October.
Yet China's total rate of stockpiling crude oil this year has been much higher than in 2019 due to the ultra-low prices in the spring, expansion of storage sites, and the policy to ensure energy security.
According to Russell, now that the backlog of shipments has cleared, Chinese oil imports were likely to range between 10.5 million bpd and 11.5 million bpd in the coming months, mostly on the back of new refining capacity additions as China is about to overtake the United States as the largest refiner in the world. Also, Beijing will soon issue new import quotas for the independent refiners who are adding the new processing capacity, ensuring demand while other key markets remain subdued amid the second wave of the coronavirus.
By Irina Slav for Oilprice.com
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Comments
China’s average oil imports at 11.67 million barrels a day (mbd) during the first ten months of 2020 was 12.7% higher than the same period in 2019 despite the COVID-19 pandemic.
That is what matters rather than monthly variations.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London