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China: Record refinery throughput


Refinery throughput in China reached record levels in the month of December, according to data released by China’s National Bureau of Statistics. China processed 43.12mte of crude in December or 10.1mmb/d, up 0.3% MoM and nearly 10.0% YoY. Refinery throughput has risen 4.0% YoY to average 9.2mmb/d in 2012, up from 8.9mmb/d in the year before, as new refinery capacity came onstream, though many of China’s so-called ‘teapot’ refineries are likely to remain under pressure in 2013.

Apparent demand also reached record levels, rising 0.1mmb/d (+1.2%) MoM to 10.5mmb/d under the refinery side methodology (crude processed plus net product imports). However, as the IEA suggests (see IEA Data: January report; cut in OPEC production, of 21 January), this apparent demand calculation could include ‘borrowed demand’ from 2013, as refiners might have upped production ahead of a change in excise duties.

The lower apparent demand calculated under the crude side methodology (domestic crude oil production plus net imports) as compared to the refinery side methodology would imply a draw in crude inventory but also a likely build in product inventory.

Meanwhile, data published by the General Administration of Customs of China had crude imports from Iran up 165kb/d (39%) MoM to 589kb/d, the second highest in a year. China’s imports of Iranian crude were down 116kb/d (21%) YoY, with the large dip in early 2012 likely attributable to a commercial disagreement between the parties while the dip in late summer/autumn coincided with the sharp deceleration seen in China at that time.

Overall, the Sudans were worst off in 2012, as exports to China dwindled to just 62kb/d, down 197kb/d (76%) YoY, as a result of the ongoing dispute between Sudan and South Sudan. Angola benefitted the most, in terms of increased export volumes to China, with exports up 177kb/d (29%) YoY. Saudi Arabia remained China’s largest crude oil exporter, while Russia overtook Iran. 

Colin Smith, Marc Jacouris
VTB Capital analyst

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