SHANGHAI (Interfax-China) -- China's crude oil imports slowed further in October to reach just 12.61 million tonnes, their lowest level since February due to record high international crude prices nearing the $100-per-barrel benchmark as well as sluggish demand from domestic refineries, according to data released today by China Customs.
Domestic refineries are lacking incentives to refine as exports to the international market, which pays better prices for oil products, are now controlled by the government and artificially low domestic retail prices make it hard to generate profits domestically despite robust demand for diesel, according to analysts.
However, the October figure still represented a 16.5% increase on the same period last year, and brought the total crude import figure for the first 10 months of the year up to 136.68 million tonnes, up 13.8% on the same period in 2006.
China's crude exports for the January to October period stood at 2.91 million tonnes, down 42.8% year-on-year, as the country has struggled to meet robust domestic energy demand.
The country imported 2.19 million tonnes of oil products in October and exported 1.12 million tonnes. Recent domestic fuel supply shortfalls, particularly in diesel and gasoline, have caused major state-owned oil companies to cut exports and increase imports despite the huge losses incurred due to a mismatch between domestic and international fuel prices.
Oil product exports for the January to October period stood at 12.99 million tonnes, up 30.4% from a year earlier, while imports for the same period were down 8.9% at 29.02 million tonnes.
In the meantime, China exported 5.25 million tonnes of coal in October, up 18.8% on the previous year's figure of 4.42 million tonnes.
China has already surpassed its planned crude imports from Central Asia this year, with the country importing over 4 million tonnes of crude from the region through the Alashankou port of entry in the Xinjiang Autonomous Region during the first 10 months of this year, state media reported yesterday.
By the end of October, some 3.54 million tonnes of crude oil had been imported into the country via the Sino-Kazakhstan oil pipeline, and 536,200 tonnes of crude oil had been brought in via rail, China News Urumqi reported, citing customs figures. The greater-than-expected import figure from the region has come about due to growing domestic oil demand.
Situated on the China-Kazakhstan border, the Alashankou port of entry is the only single entry point with railway, highway and pipeline connections in northwestern China.
The Sino-Kazakhstan oil pipeline officially started operation in December last year and has an annual transmission capacity of 20 million tonnes. The pipeline imported a total of 3 million tonnes in 2006.
Originating in the eastern Kazakhstan town of Atasu, the Sino-Kazakhstan oil pipeline stretches to Dushanzi, a city and petrochemical industry base in Xinjiang. The pipeline is over 1,000 kilometres in length and was the first international oil pipeline to be owned and operated by China in cooperation with another country.
Interfax-China 2007. For further information regarding Interfax China Commodities Daily Reports, contact David Harman at david.harman@interfax-news.com or (852) 2537-2262.
