China's crude stocks slump despite slight rise in September import rate

BEIJING: China’s September crude oil imports dropped 21.5% from a year earlier, customs data showed, with higher refinery runs and delayed crude arrivals contributing to the biggest monthly draw in the country’s onshore crude inventories in analysts’ records.

The world’s biggest oil buyer imported 37.1 million metric tons of crude oil in September, or 9.03 million barrels per day, with the daily import rate up 1.1% from the previous month, according to data from China’s General Administration of Customs.

In the first three quarters, China imported 357.97 million tons of crude oil, or 9.57 million bpd, down 15.3% from the same period last year.

China’s September seaborne crude oil imports stood at 7.6 million bpd, down from 9.9 million bpd a year earlier, according to Vortexa, with Iranian oil imports falling to 0.5 million bpd during the month.

China’s crude distillation capacity utilisation rate rose to 66.36% in September, up 1.98 percentage points from August, according to Oilchem.

In September, demand was supported by a surge in fuel exports, while both diesel and gasoline inventories fell to their lowest levels in more than a decade.

Vortexa recorded a 57 million-barrel draw in onshore crude inventories, while Kpler recorded a draw of 47.5 million barrels in September. Both providers reported the biggest monthly inventory draws since their data series began in 2019 and 2017, respectively.

“Middle East shipping disruptions, mainly bottlenecks in ship-to-ship transfers around Hormuz, are expected to significantly delay crude cargoes due in late August and September, forcing refiners to draw on stocks,” said Emma Li, an analyst at Vortexa.

Kpler pegged China’s fourth-quarter seaborne crude imports at 8 million to 8.5 million barrels per day.

Some Iranian crude would likely be replaced by supply from other Middle Eastern countries, mainly Iraq, while shipments from Saudi Arabia would likely “rise substantially” in October and November, said Muyu Xu, an analyst at Kpler.

“Replacing all Iranian supplies would be difficult, so the recovery in China’s seaborne imports could be slower,” Xu said.

Customs data also showed that China’s natural gas imports in August, including LNG and pipeline gas, stood at 10.86 million tons, down 1.7% from a year earlier.

In the first three quarters, natural gas imports stood at 89.23 million tons, down 3.9% year on year.

China’s exports of refined oil products, including gasoline, diesel, jet fuel and fuel oil, totalled 7.16 million tons in September.

In the first nine months, China exported 41.4 million tons of refined oil products, down 3.7% year on year.