China Refined Oil Apparent Consumption Volume Increased M-O-M

Recently, China’s General Administration of Customs released the statistics of China’s refined oil apparent consumption volume in May. Therein, China’s refined oil apparent consumption volume in May was 25,915kt, up 6.86% from last month and down 1.07% from last year. China’s total refined oil apparent consumption volume from January to May 2019 was 126,822.2kt, down 3.78% from last year. The reason led to the refined oil apparent consumption volume decrease was the drop of diesel apparent consumption volume. According to the statistics, from January to May 2019, every month’s diesel apparent consumption volume decreased from last year, and the diesel apparent consumption volume in March and April even dropped 17% from last year.

In May 2019, China’s gasoline apparent consumption volume was 10,967.6kt, up 8.84% from last year and up 4.38% from last month. The gasoline export volume decreased by 27.35% from last month. Therefore, the gasoline apparent consumption volume increased significantly.

In May 2019, China’s diesel apparent consumption volume was 11,951kt, down 9.08% from last year and up 10.18% from last month. The operating rates at China’s refineries decreased, and many refineries increased their gasoline/diesel output ratio. As a consequence, the output of diesel in May decreased from last month and from last year. Moreover, the logistics and infrastructural constructions supported the diesel demand, and the diesel export volume dropped significantly from last month and from last year.

In May 2019, China’s kerosene apparent consumption volume was 3,096kt, up 1.01% from last year and up 3.48% from last month. Due to the May Day holiday and the Dragon Boat Festival holiday, China’s demand for kerosene increased, and China’s refineries raised their kerosene yield rate to 8.24% in May. Moreover, the export volume of kerosene decreased, and the kerosene apparent consumption volume increased.

According to the statistics, the major reason led to the increase of China’s refined oil apparent consumption volume in May was the sharp drop in refined oil export volume. However, whether the refined oil export volume will remain at a low level is not certain. From January to May, the utilization rate of China’s refined oil export quota was only 43.1%. Moreover, with Zhejiang Petrochemical and Dalian Hengli Petrochemical going into operation, the competition in China’s refined oil market will intensify. Meanwhile, China’s refined oil demand is unlikely to increase significantly in a short time. Therefore, the future refined oil export volume is likely to go up.

In June, Sinopec Qingdao Refining and Chemical, PetroChina Lanzhou Petrochemical, etc. took turnarounds, and the average operating rate at China’s refineries decreased. Therefore, SCI reckons that the refined oil output is unlikely to surge, and the refined oil apparent consumption volume may inch down.

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