China’s crude import growth slows as refining inventories swell

By Meng Meng and Chen Aizhu

BEIJING, April 13 (Reuters) -- China's crude oil imports rose nearly 22% on a daily basis in March from a year earlier, off a record-high in February, while imports for the first quarter grew over 13% from the same period in 2015, official data showed.

Chinese imports have been picking up in recent months due to strong demand from independent refiners and better refining margins. Robust purchases from these so-called "teapot" plants have caused severe port congestion in eastern Shandong province, a hub for the independents.

March imports stood at 32.61 million tons, or 7.68 MMbpd, easing from a record rate in February of 8 MMbpd, according to numbers issued on Wednesday by the General Administration of Chinese Customs.

For the first quarter, imports rose 13.4% on the year to 91.1 million tons, or about 7.31 MMbpd. That would be an increase of nearly 800,000 bpd on average during the period.

Independent refineries have been ramping up their crude processing rates and boosting fuel sales as low global oil prices provide higher margins. The jump in their crude runs has even forced many state oil firms to make rare cuts in refinery throughput.

But hefty levels of imports may not last into the second quarter as inventories have swollen.

"China's crude import growth is unlikely to sustain at Q1 levels because demand is seasonally lower in Q2 and there has been some port congestion issues which will slow buying," said Virendra Chauhan of consultancy Energy Aspects.

A senior official with Sinopec's trading unit said on March 31 that China's crude oil imports were expected to rise to 7.5 MMbpd in 2016, likely trumping the US as top importer.

Fuel exports in March rose 25.4% over February to 3.75 million tons, as China continues to export more diesel and gasoline amid a growing supply surplus and weak domestic demand for diesel fuel from the industrial and construction sectors.

Net fuel exports were 1.30 million tons in March.

China has granted refiners additional fuel export quotas of more than 14 million tons, bringing the total issued so far this year to more than 35 million tons, a trade source said last week.

Earlier on Wednesday, the National Development and Reform Commission said domestic consumption of key transportation fuels gained 7.2% on year, with diesel up nearly 3%, reversing a decline seen in the first two months of 2016.