Platts Report: China's Oil Demand Reaches Record High in December
Expected Economic Recovery Will Likely Lead to Higher 2013 Oil Consumption
Singapore - January 23, 2012
China's apparent oil demand* rose 7.7% year on year in December to 44.76 million metric tons (mt), or an average 10.58 million barrels per day (b/d), the highest on record, according to Platts analysis of recent Chinese government data showed.
“Last month we saw strong growth in China’s oil demand of 7.7%, which was higher than the 4.6% increase in December 2011. Part of this was due to a stronger economic performance, which boosted demand for raw materials. But the higher run rates were also due to refinery expansions and expected higher seasonal demand for oil products,” said Song Yen Ling, Platts senior writer for China.
December apparent demand surpassed the previous record high of 10.5 million b/d in November 2012, when apparent demand had risen 9.2% year on year.
The robust growth comes on the back of a recovery in China’s economy, which rebounded to 7.8% in the fourth quarter after bottoming out in the third quarter.
Apparent oil demand in December was boosted by record refinery throughput, which rose 8.4% from December 2011 to 10.2 million b/d last month, according to data released by China’s National Bureau of Statistics. This was despite net oil product imports in December falling 8.4% year on year to 1.64 million mt.
Chinese refiners kept their refinery run rates high from September last year to prepare for increased seasonal winter demand, particularly after they had depleted domestic product stocks in the summer. In addition, new refinery capacity expansions also likely resulted in higher refinery runs.
Overall apparent oil demand in China averaged 9.68 million b/d in 2012, an increase of 3.4% compared with 2011. Growth this year could surpass this if the economy continues to improve and the government maintains its stimulus measures.
“As the recovery in China’s economy continues, it is likely that the country will consume more oil this year,” said Song.
In China’s individual oil products markets, apparent demand for gasoil in December was largely flat from the same month in 2011, dipping 0.9% year on year to 14.73 million mt or 3.56 million b/d. China consumes more gasoil than any other oil product.
Domestic production for the fuel, primarily used in the transport and industrial sectors, rose 2.2% year on year to 14.98 million mt in December, while net exports were 250,000 mt, compared with net imports of 210,000 mt in December 2011.
“It’s expected that gasoil demand will pick up in the coming months, given China’s strong industrial production. Similar to November, the higher gasoil exports in December were likely due to extra refining capacity coming online,” Song said.
Apparent demand for gasoline in December rose 16.7% year on year to 8.22 million mt (2.25 million b/d), largely driven by domestic output, which rose 17.6% to 8.47 million mt. China is a net exporter of gasoline. Total gasoline exports last month rose 31.6% year on year to 250,000 mt.
Meanwhile, jet fuel/kerosene demand in December rose by 13.7% year on year to 1.61 million mt (405,000 b/d), buoyed by domestic production which surged 16.2% year on year to 1.9 million mt. Jet/kerosene exports rose 13% to 780,000 mt while imports edged up 4.3% to 490,000 mt.
MONTHLY TRADE DATA IN MILLION METRIC TONS:
Net crude imports
*Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.
The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.
Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.
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