By Clyde Russell
LAUNCESTON, Australia- China’s imports of major commodities were either openly weak in May, such as the decline in crude oil, or those showing apparent signs of strength were deceptive and largely driven by factors other than rising consumption.
Arrivals of crude dipped into negative territory for the first five months of the year, with calculations based on official customs data released on June 7 showing imports of 11.0 million barrels per day (bpd) in the January to May period, down 1.2 percent from 11.13 million bpd in the same period last year.
China, the world’s largest crude importer, landed 11.06 million bpd in May, which was slightly up from April’s 10.88 million bpd, but massively down from the 12.11 million bpd in May 2023.
The decline in year-on-year imports has been put down to weak refining margins crimping throughput, and the 7.7 percent drop in fuel exports in the first five months of 2024 has also contributed to lower demand for crude.
China’s imports of crude are down 130,000 bpd in the first five months of the year, an outcome that is starkly at odds with the expectations of the Organization of the Petroleum Exporting Countries (OPEC).
The exporter group forecast in its May monthly outlook that China’s crude demand will rise 710,000 bpd for 2024 as a whole, the biggest contributor to world demand growth of 2.25 million bpd.
To be fair to OPEC, the group does expect a stronger second half for China’s oil demand, but even so, growth in imports is running so far behind the OPEC forecast that the second half will have to be exceptionally strong.
