Despite the contraction, this was the second-highest monthly volume on record. Following government revisions to data from a year ago, China's apparent oil demand in February 2014 was adjusted to an average 10.8 million b/d – the record high volume.
Apparent oil demand in February this year increased 4.3 percent from January’s average of 10.2 million b/d.
China’s refinery throughput in February averaged 10.4 million b/d, falling 2.5 percent from a year earlier but expanded 2.4 percent month-over-month, data from the country’s National Bureau of Statistics showed March 13.
Figures from the General Administration of Customs released March 8 showed oil products imports for February jumped 11.2 percent to 2.7 million mt, while oil product exports slumped 16.8 percent to 1.68 million mt, reflecting some inventory build by state-owned refiners. This resulted in net oil product imports of 1 million mt in February.
Over January to February, China’s total apparent oil demand rose 2.6 percent to average 10.4 million b/d. This is the highest rate of growth over the two-month period since the 5.7 percent recorded in 2012, in contrast to the 0.6 percent contraction seen over the same period last year.
“While there appears to be some recovery, apparent demand is often strong during the first two months of the year,” said Platts senior writer for China, Song Yen Ling. “This could partly be attributed to significant stock build in oil products by refiners.”
Gasoil
Apparent demand for gasoil – the most widely consumed oil product in China – slumped 5.6 percent year-over-year in February to 13.3 million mt, a reflection of subdued industrial demand during the Lunar New Year that was on February 19 this year. Up to 70 percent of the fuel is used in the transport sector while the remainder is used by various sectors, including construction, farming and fishing, industrial heating and to power machinery.
Apparent demand for gasoil rose 2.3 percent over the first two months of this year to 28.1 million mt, the first time there was positive growth over the same period since 2012. However, actual consumption was likely lower than this level as significant stocks – close to 3 million mt – were likely added to storage over the two months, according to Platts’ estimates. Chinese refiners typically start building inventories in preparation for Lunar New Year holidays.
Gasoline
Apparent demand for gasoline in February edged up 1.9 percent year-over-year to 8.8 million mt. Higher travel during the festive season also saw a growth of 8.2 percent from January to February to 18.1 million mt. In addition, Chinese passenger vehicle sales rose 8.7 percent to 3.4 million units in the first two months of the year, according to the China Association of Automobile Manufacturers.
Fuel Oil
Fuel oil witnessed a further decline in demand following consumption tax increases in the fourth quarter of last year, which has made the fuel more expensive for the country’s independent teapot refiners to buy. The refiners use fuel oil as an alternative feedstock in the absence of crude import rights.
Apparent demand for fuel oil in February slumped 17.6 percent year-over-year to 2.6 million mt, with year-to-date volumes falling 21.5 percent to 5.1 million mt. Net imports of the fuel over January-February were at their lowest since 2010, at 1.4 million mt.
Monthly Trade Data In Million Metric Tonnes
Source: China’s General Administration of Customs, National Bureau of Statistics, Platts
| Feb ‘15 | Feb ‘14 | % Chg | Jan ‘15 | Dec ‘14 | Nov ‘14 | Oct‘14 | |
| Net crude imports (million mt) | 25.39 | 22.88 | +11.0 | 27.81 | 30.13 | 25.41 | 24.09 |
| Crude production (million mt) | 16.18 | 16.16 | +0.1 | 17.97 | 18.32 | 17.63 | 17.94 |
| Apparent demand (million mt) | 40.70 | 41.11 | -1.0 | 43.22 | 44.96 | 42.18 | 42.65 |
| Apparent demand (‘000 b/d) | 10,655 | 10,762 | -1.0 | 10,219 | 10,631 | 10,306 | 10,085 |
Month-to-month demand in China is generally viewed to be subjected to short-term anomalies which are of interest and important to note, but often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.
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 NBS and Chinese customs. A conversion rate of 7.3 barrels of crude per metric tonne, the widely-accepted benchmark for markets East of Suez was used. Platts took into account undeclared revisions in NBS historical data.
