Chinese oil imports surge as KSA reclaims export mantle

Demand from new refineries in China strengthened purchases by the world’s biggest oil importer, adding more than 900,000 barrels per day to the country’s oil-processing capacity. (Shutterstock)
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Updated 15 January 2020

Chinese oil imports surge as KSA reclaims export mantle

  • Kingdom replaces Russia as biggest crude supplier, helping Beijing set record for 17th straight year

SINGAPORE: China’s crude oil imports in 2019 surged 9.5 percent from a year earlier, setting a record for a 17th straight year, as demand growth from new refineries built last year propelled purchases by the world’s biggest importer, data showed on Tuesday.

Last year, China imported a record 506 million tons of crude oil, according to data from the General Administration of Customs. That is equivalent to 10.12 million barrels per day (bpd), according to Reuters’ calculations based on the data.

December arrivals were 45.48 million tons, customs reported. That is equivalent to 10.71 million bpd, according to Reuters’ calculations, the third-highest ever on a daily basis and down from a record of 11.13 million bpd set in November.

The annual increase equates to 882,000 bpd in incremental purchases, largely because of demand from new plants that added 900,000 bpd to China’s oil-processing capacity, although some of the units started operating only in December.

“Chinese independent refineries, including two mega-projects Hengli and Rongsheng, stepped up purchases before year-end to maximize the utilization of crude import quotas,” said Chen Jiyao, oil consultant at FGE.

However, state refiners likely slowed down opportunistic purchases amid elevated freight rates in October, resulting in lower December arrivals, said Chen.

Last year marked the biggest penetration of private chemical companies into China’s refining business, after the emergence between 2016 and 2018 of smaller independent oil processors often known as “teapots.”

Hengli Petrochemical and Zhejiang Petrochemical Corp, controlled by Zhejiang Rongsheng Holdings, each added 400,000 bpd in processing capacity, mainly focused on petrochemical output. That boosted China’s crude oil imports notably from Saudi Arabia, helping the Kingdom reclaim its title from Russia as China’s top crude supplier.

Meanwhile, natural gas imports, including fuel supplied as liquefied natural gas (LNG) and via pipeline, were 9.45 million tons, the third-highest on record on a monthly basis.

The hefty December purchases included LNG imports that rose to a record last month with China overtaking Japan the world’s top importer of the fuel for the second month in a row.

Imports in 2019 expanded by 6.9 percent to 96.56 million tons, with annual growth slowing from 31.9 percent recorded for 2018.

China’s gas consumption slowed last year as Beijing eased its coal-to-gas switching program amid a slowing economy and growth in domestic gas output.

Tuesday’s data also showed China’s refined fuel exports in 2019 rose 14.1 percent from a year earlier to a record 66.85 million tons as refinery throughput outpaced domestic fuel demand growth. December exports were 6.79 million tons.

China raised the volumes of its first batch of 2020 fuel export quotas by 53 percent from a year earlier to 27.99 million tons.


Dubai to support Emirates airline, closes tourist market

Emirates airline is vital to the Dubai and UAE economy. (Shutterstock)
Updated 3 min 56 sec ago

Dubai to support Emirates airline, closes tourist market

  • Dubai’s Crown Prince Sheikh Hamdan bin Mohammed said the emirate’s government would inject fresh equity into the Emirates airline, considering its strategic importance to the Dubai and UAE economy

DUBAI: Dubai said on Tuesday it would help its state-run Emirates airline overcome the damaging impact of the coronavirus outbreak and enforced a full lockdown on a district famous for its gold and spice markets.
The UAE, the region’s tourism and business hub, has taken drastic measures to combat the spread of the virus including temporarily halting passenger flights and launching a nationwide disinfection drive.
It had already extended a nightly curfew to April 5 to deep clean the country, but Dubai announced late on Monday that a 24-hour curfew would be imposed on the normally bustling tourist and trade district of Al Ras for two weeks.
“I am glad they are doing this because it is for our protection,” said one rice trader who works in Al Ras but resides in the UAE’s Sharjah emirate. The trader, who declined to be named, told Reuters he is now conducting business online.
Dubai closed the main road entrances to Al Ras and halted public transport to the area, which abuts Dubai Creek, where dhows have been banned from shipping goods between Dubai and Iran, a regional epicentre for the virus. Authorities would provide residents with essential needs, the Dubai Media Office said.

HIGHLIGHTS

● Dubai to inject fresh capital into state airline.

● Historic Dubai tourism and trade district under lockdown.

● Coronavirus cases pass 3,700 in the six Gulf Arab states.

The UAE has confirmed 611 coronavirus cases, with five deaths. It plans to open more drive-thru testing centres after the first was opened last week in the capital, Abu Dhabi.
“We will never hesitate to take any measures against any potential threat to people’s life. At the same time, we won’t let development grind to a halt,” Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan, the country’s de facto ruler, said in comments carried on state media.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed said the emirate’s government would inject fresh equity into the Emirates airline, considering its strategic importance to the Dubai and UAE economy.
The total number of infections in the six Gulf Arab states stands at more than 3,700, with 18 deaths.
In Kuwait, the first Gulf state to halt passenger flights and impose a partial curfew, the health minister said a clearer picture on the success of containment efforts would emerge by early June “If infection numbers stabilize, there may be a gradual easing of current measures,” Basil Al-Sabah told Al Rai newspaper. “But if the average rate of transmission increases then ... I do not rule out the cabinet enforcing a full curfew.”
Kuwait recorded 23 new infections on Tuesday to take its total to 289. Saudi Arabia, has passed 1,400, with eight deaths.