Rebound in China crude oil imports less impressive than it looks
China's imports of crude oil rebounded in October, but the details aren't as strong as the headline number suggests.
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The world's largest crude buyer imported 10.16 million barrels per day (bpd) in October, the highest since May and a 14 per cent leap from the same month in 2021, according to data released on Monday (Nov 7) by China customs.
There were several factors driving the increase in October, but a strong demand-led recovery is unlikely to be one of them.
Rather, it was a combination of crude being imported to build operating inventories for two new refinery units, a lower price versus prior months, more import quotas for independent refiners and an ongoing boost to exports of refined fuels.
PetroChina started trial operations at a 200,000 bpd crude unit at its new refinery in Guangdong, while Shendong Petrochemical is also starting operations at its new 320,000 bpd plant in Jiangsu province.
Refinery units typically need about three weeks of operating inventories, suggesting the two new plants would require almost 11 million barrels of crude to fully commence operations.
This additional crude would likely have been secured over a period of months, but it still adds to China's incremental imports in recent months, but is also a factor that won't be ongoing.