Buying by China, which overtook the U.S. during the first quarter as the world’s biggest importer, averaged 8.4 million barrels a day in April, down 8.8 percent from a record the previous month, according to Bloomberg calculations based on data Monday from the General Administration of Customs. Net exports of oil products fell almost 49 percent from March to 1.01 million tons.
Imports have accelerated this year as China’s state energy giants pump less crude after last year’s price crash forced them to cut spending on the country’s mature, high-cost fields. The import decline from a record in March was due to seasonal refining maintenance picking up and independent processors, known as teapots, reaching their buying quotas, according to Jean Zou, an analyst at Shanghai-based commodities researcher ICIS-China.
“Teapot buying in April eased a bit after the high level in March,” Zou said by phone before the data were released. Imports last month by the independent refiners in Shandong province, where the majority are based, dropped to about 7.8 million metric tons, from 9.9 million in March, she said.
Though China’s state-run oil giants are raising combined spending for the first time in four years, it may not be enough to halt the drop in domestic crude output, especially as their focus shifts toward producing natural gas, according to the International Energy Agency. Production in the first quarter of this year dropped 6.8 percent from the same period a year ago, extending the record pace of declines in 2016.
“China’s crude imports will stay at a relatively high level, mostly because of China’s rather weak domestic output and strong fuel demand,” Tian Miao, a Beijing-based analyst at North Square Blue Oak Ltd., said before the data release. “March imports were driven by stockpiling and inventory builds from teapot refineries, something that doesn’t happen very often, so that could easily be the monthly record for this year.”
On a monthly basis, China imported 34.39 million tons of crude, the data showed. Inbound shipments are up 12.5 percent during the first four months of the year to 139 million tons, or about 8.49 million barrels a day. The U.S. imported about 8.18 million barrels a day during that period, Bloomberg calculations using weekly data show.