China oil demand climbed 5.4% year over year in April

China's apparent oil demand in April increased 5.4% from a year earlier to 42.89 million metric tons (mt), or an average 10.48 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data.

“Apparent demand figures may be inflated compared with actual oil consumption because crucial data such as inventories are not taken into account,” said Platts senior writer for China, Song Yen Ling. Apparent demand during the month was mainly supported by an increase in demand for light-end products such as gasoline.

China’s refinery throughput in April averaged 10.54 million b/d, rising 6.9% from a year earlier, showed data from the country’s National Bureau of Statistics on May 13. On the other hand, China was a net oil product exporter in April, with volumes totaling 240,000 mt, according to data released May 8 by the General Administration of Customs.

During the first four months of this year, China’s total apparent oil demand also averaged 10.48 million b/d, an increase of 4.4% over the same period of 2014. This continued to be the fastest pace of year-to-date growth since 2011, and it defied a relatively weak macroeconomic outlook.

“Gasoil apparent demand, for example, has shown fairly strong growth even though end users have not reported any significant increase in actual demand,” Song added.

Gasoil is the most widely consumed oil product in China and demand has been hit in the last three years because of declining economic growth. Yet apparent demand in April expanded by a robust 6.5% year over year to 14.62 million mt.

Actual consumption was likely lower as market players reported high stocks in the domestic market. Up to 70% of the fuel is used in the transport sector while the remainder is used by various sectors, including construction, farming and fishing, industrial heating, and to power machinery. Apparent demand for gasoil rose 4.6% over January to April to 58.24 million mt, improving from a contraction during the corresponding period of last year.

Demand for LPG in China has rebounded in the last two years following the start of new propane dehydrogenation plants in the petrochemicals sector. These facilities primarily use imported LPG as feedstock. Apparent demand for LPG in April was up 23.3% year on year to 3.37 million mt, with net imports rising 60% over the period to 944,000 mt. So far this year, apparent demand for LPG has gained 22.9% year over year to 12.18 million mt.

Meanwhile, apparent demand for gasoline climbed 12.3% year over year to 9.58 mllion mt, with year-to-date demand rising 9.1% to 37.25 million mt, buoyed by higher passenger car sales. Sales of sports utility vehicles, in particular, have risen 48.7% so far this year, while multi-purpose vehicle sales have also surged 20% from a year earlier.

Fuel oil witnessed a further decline in demand following consumption tax increases in the fourth quarter of last year, which has made the fuel more expensive for the country’s independent teapot refiners to buy. These refiners use imported fuel oil as an alternative feedstock in the absence of crude import rights.

Apparent demand for fuel oil in April slumped 19.3% year over year to 2.54 million mt. Net fuel oil imports fell 44.6% during the month to 510,000 mt. Apparent demand for fuel oil during January to April tumbled 17.8% to 10.54 million mt.  


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