China September Crude Imports Rise from a Year Ago as Travel, Manufacturing Recover
China’s crude oil imports in September grew nearly 14% from a year earlier, as refiners stepped up purchases ahead of the Golden Week travel period and manufacturing indicators improved.
Shipments last month to the world’s biggest oil importer were 45.74 million metric tons, or 11.13 million barrels per day (bpd), data from the General Administration of Customs showed.
The figures for September continue a trend seen through 2023, in which imports significantly exceed 2022 levels, when China’s economy was hammered by widespread pandemic restrictions.
Year-to-date imports gained 14.6% from a year earlier to 424.27 million tons, or 11.34 million bpd.
However, September’s levels eased around 10.5% in bpd terms from August’s figure of 12.4 million bpd, which was the third highest on record.
“The month-on-month decline in September crude imports is mostly driven by Saudi and Russian volumes, as oil majors cut Saudi nominations and accelerated crude destocking, while teapot refiners continue pivoting away from pricy Russian oil,” said Emma Li, a China oil markets analyst at Vortexa in Singapore.
“China-bound crude loadings in September suggest that the volumes from the top suppliers have rebounded… because crude throughputs remain strong, especially among state-run refiners,” Li added.
The solid imports last month came ahead of an expected increase in demand for transport fuel during the Golden Week holiday, which ran from the end of September through to the first week of October.
Travellers during Golden Week made 826 million trips within mainland China, up 71.3% from a year ago and 4.1% higher than in 2019, according to data released by state media outlet Xinhua.
International travel over Golden Week, while lower than initial government estimates, further drove demand, reaching 85% of pre-pandemic levels.
China’s manufacturing activity also recovered in September, suggesting negative economic sentiment from an underwhelming pandemic recovery may have bottomed out. September manufacturing PMI edged up to 50.2, above the 50-point level demarcating a contraction in activity from expansion.
Last week, Chinese authorities issued a fourth batch of 2023 crude oil import quotas, raising the volume for the year to 203.64 million tons, up 14% on 2022.
Imports of natural gas, including piped and liquefied natural gas, were 10.15 million tons in September, roughly equal to last year, the customs data showed.
Refined fuel exports last month were 5.44 million tons, customs said, down from 5.89 million tons in August and 3.6% below last year.
Regional refining margins DUB-SIN-REF fell from $10.65 per barrel at the start of September to around $6.70 at the end of the month. (ton=7.3 barrels for crude conversion)
Trans Mountain Oil Pipeline 90% Complete
The Trans Mountain oil pipeline is nearly finished and will be “complete in the coming months,” Canadian Minister of Energy and Natural Resources Jonathan Wilkinson told Bloomberg on Friday.
“I don’t have a specific date in front of me in terms of when the corporation expects to complete it, but the project is over 90 per cent complete,” Wilkinson shared, adding that he certainly expects it to come online “over the course of the 2024 period.”
Wilkinson pointed to various delays that have plagued the expansion project, the costs of which have ballooned to an estimated $30 billion.
The pipeline is once again moving ahead after securing a legal victory after being challenged in court by the Stk’emlupsemc Te Secwepemc Nation First Nation over the pipeline’s newly proposed route that would go through a 0.8-mile segment of the indigenous group’s territory. Canada’s regulator CER sided with the pipeline, thus preventing even more delays.
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Once complete and flowing oil, the newly expanded pipeline will be able to carry an additional 890,000 barrels per day of crude oil. The project has been fraught with legal challenges and opposition from climate and indigenous groups, causing the federal government to purchase the project to ensure it would move forward.
And while controversy surrounding the pipeline remains, over 130 indigenous groups have expressed interest in purchasing a partial stake in the pipeline. Still, Canada could have a tough road ahead in recouping the $26 billion in taxpayer money that it paid for it, with uncertainty surrounding potential buyers—many of whom may shy away from any fossil fuel asset–and shifting trade routes for oil following Russia’s invasion of Ukraine and the resulting sanctions.
Canada is hoping to complete the sale of the pipeline in 2025.
