China’s crude oil imports surged almost 32% year on year to 9.65 million b/d or 40.8 million mt in October, preliminary data from the General Administration of Customs showed Thursday.

On a barrels-per-day basis, the inflow represented a 6.2% increase from 9.09 million b/d in September, which was within expectations.

Platts trade flow software cFlow showed previously that crude barrels delivered to China in October hit a record high of 8.88 million b/d in October.

China imports crude both by water and pipeline, while cFlow covers arrivals from the seaborne market.

The last record high was at 9.64 million b/d in April, when seaborne imports rose to 8.75 million b/d, according to cFlow data.

Robust imports in October lifted the country’s crude oil imports over the January-October period to 377.16 million mt (9.09 million b/d), up 8.1% from the same period a year earlier.

However, Platts Analytics kept its projection at 9.2 million b/d for China’s crude imports in Q4 to average 9.2 million b/d, which means inflows in November and December would fell from the record high in October.

“Refining demand for crude oil from the state-owned refineries in northern China is weakening as the peak season for oil products nearly ends in winter, while they are not allowed to send more products to overseas in Q4,” said a Beijing-based analyst.

State-owned Sinopec, PetroChina, CNOOC and Sinochem have cut their average refinery run rates to 82% of nameplate capacity in October from 84% in September, according to the Platts survey.

However, heavy arrivals for the independent sector were likely to cap the decrease.

“Propelled by the strong buying [from the independent sector], it is likely that their imports will stay above 9 million mt [2.16 million b/d] in the coming two months,” the analyst added.

Crude imports by the independent sector rose 28% on the month to a seven-month high of 2.2 million b/d in October, according to a Platts survey.

They started a buying spree in mid-August till end-September — when refining margins were good — for the cargoes to arrive in Q4.

Moreover, independent refineries typically look to use up their crude oil import quotas before the end of the year, so that they can secure full allocations for the next year.

After taking October arrivals into account, the quota holders had used up only 67% of their total quotas for the current year, with around 40 million mt still available for the November-December period, according to Platts data.

PRODUCT EXPORTS

China’s oil product exports fell to 4 million mt in October, an eight-month low, as export availability remained tight. The October total was down by 1.7% from September but increased 7.8% year on year. It was last lower in February at 3.48 million mt.

The low exports in October were also within expectation, due to low export quota availability for the month.

Chinese oil companies usually have their export plans a month ahead of the loading days, which means they had their October loading plans in September when they were short of export quota.

Over the January-October period, China’s product exports totaled 48.09 million mt, up 19% year on year, the data showed.

The GAC did not release the list of oil products included in the preliminary statistics, but market sources estimated gasoline, gasoil, jet fuel and fuel oil accounted more than 99% of the basket. The export data by product for October will be release later this month.

Market sources said they expected product exports in November would rebound as Beijing released a fresh batch of oil products export quotas in October, totaling 2.93 million mt.

With the new allocation, Chinese companies were allowed to export up to 2.2 million mt of gasoline in Q4, 3.48 million mt gasoil and 5.24 million mt jet fuel.

Among these products, the strong rebound was more likely to go to jet fuel. Its quota availability averaged 1.75 million mt/month in Q4, higher than the actual exports of 1.16 million/mt averaged in January-September.

Moreover, Q4 is Asia’s peak season for jet/kerosene consumption, with increased traveling during the Christmas and New Year holiday, and higher heating demand during winter. The strong demand in international markets would also likely encourage jet/kerosene exports.

However, the rebounds were expected to be modest for gasoline and gasoil due to the relatively tight the availability for October-December, at 733,000 mt/month and 1.16 million mt/month, respectively.

In January-September, China’s gasoline and gasoil exports averaged at 1.15 million mt/month and 1.59 million mt/month, respectively.

PRELIMINARY IMPORT, EXPORT DATA (million mt)

Oct-18 Oct-17 Change Sep-18 Change Crude imports 40.80 31.03 31.5% 37.21 9.6% Crude exports 0.14 0.27 -47.8% 0.29 -50.5% Net crude imports 40.66 30.76 32.2% 36.93 10.1% Oil product imports 2.55 1.95 30.8% 2.92 -12.6% Oil product exports 4.00 3.71 7.8% 4.07 -1.7% Net oil product exports 1.45 1.76 -17.7% 1.15 25.9% Fuel oil imports 1.19 0.79 51.1% 1.73 -31.0%

Jan-Oct 18 Jan-Oct 17 Change Crude imports 377.16 348.83 8.1% Crude exports 2.34 3.85 -39.3% Net crude imports 374.83 344.98 8.7% Oil product imports 27.14 24.35 11.4% Oil product exports 48.09 40.29 19.4% Net oil product exports 20.95 15.94 31.4% Fuel oil imports 13.38 11.07 20.8%

Source: China’s General Administration of Customs

Source: Platts