May 22 2012
China's apparent oil demand* in April edged up just 0.3% year on year to 38.32 million metric tons (mt), or an average 9.36 million barrels per day (b/d), a just-released Platts analysis of recent Chinese government data showed.
This is the lowest year-on-year monthly growth in oil demand since June 2011, when it fell 8.2% to 9.02 million b/d, from a high base in the same month of the previous year.
"This is just another sign of China's economic slowdown," said Song Yen Ling, Platts senior writer for China. "We've seen this sort of evidence in crude oil imports and refinery runs, and now it's being reflected in terms of oil demand."
April demand was dragged down by low refining levels, with total runs falling 0.3% on year to 36.96 million mt, or an average 9.03 million b/d, according to National Bureau of Statistics data released on May 11.
April's crude oil processing volumes were also the lowest so far this year on a barrels-per-day basis compared with 9.07 million b/d in March, 9.32 million b/d in February and 9.38 million b/d in January.
Meanwhile, net oil product imports, rose 16.2% year on year to 1.36 million mt (323,680 b/d) in April, although this was down 24.4% compared with 428,400 b/d of imports in March.
In the first four months of the year, overall apparent oil demand averaged 9.57 million b/d, up 1.8% year on year, according to Platts' calculations.
Refinery runs were up 1.5% year on year to 9.2 million b/d for the first third of the year, while net oil product imports rose 7.5% to 359,360 b/d during the period.
And it was not only the oil markets where China's slowing economy was evident.
China's total exports grew 4.9% year on year in April, compared with 7.6% in the first quarter and 14.3% in the last quarter of 2011. Overall imports were stagnant at 0.4% in April, down from 7.1% in the first quarter and 20.6% in the fourth quarter of last year.
Bernstein Research said May 18 that China should see a rise in apparent oil demand – in the range of 4-5% – in the second half of the year given government measures to boost the economy. The People's Bank of China, the country's central bank, cut the reserve requirement ratio for bank lending on May 18 by 50 basis points, bringing it to 20% for large banks and 18% for smaller lenders. The move is expected to boost liquidity in the financial system by up to Yuan 400 billion ($63.2 billion).
"The government's aims to boost the economy will likely get things flowing again on the oil side," said Senior Writer Song. "But it will also depend somewhat on how serious China is about retail oil pricing reform so that markets are allowed to work more freely."
MONTHLY TRADE DATA IN MILLION METRIC TONS:
*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.
For more information on crude oil, visit the Platts website at www.platts.com. For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.
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