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Imports and exports What next
China imported 45mn tonnes (11mn bpd) of The country was reported in October to be
crude in November, according to preliminary building four refineries with 1.4mn bpd of pro-
General Administration of Customs (GAC) cessing capacity, enough to exceed domestic
data, down from the 11.18mn bpd imported in demand and force excess supply into the inter-
November. The country’s imports rebounded national market.
from a dip in October, when local ports strug- Indeed, China National Petroleum Corp.
gled to clear a backlog in tankers waiting to (CNPC) has projected that the country’s crude
offload their cargoes. processing capacity will climb from 17.5mn
While oil product exports tumbled 32.2% bpd this year to 20mn bpd by 2025. All this new
year on year in November to 4.95mn tonnes, the capacity will need increased crude supply and,
outlook is more promising for the rest of the year given that China’s upstream is floundering, sup-
and into next year. plies will have to come from overseas.
S&P Global Platts reported on December 7 “China is going to put another million barrels
that, according to its sources, gasoline exports a day or more on the table in the next few years,”
were likely to climb 30.7% month on month in industry consultant Facts Global Energy’s (FGE)
December to 2mn tonnes. director of refining, Steve Sawyer, told Bloomb-
Zhejiang Petroleum & Chemical (ZPC) is erg in November. “China will overtake the US
expected to account for the surge as it gears up probably in the next year or two.”
to take advantage of its recently acquired export IHS Markit director Rob Smith warned refin-
quotas – the first private refiner to enjoy such a eries struggling to stay afloat before the pan-
privilege. A company source said the independent demic were unlikely to stay in business now. The
refiner intended to ship 500,000 tonnes this month, Philippines and Australia already appear to be
in addition to the 163,000 tonnes it had already at risk of losing the last of their refining capacity.
shipped since its maiden cargo in November. China’s new refineries, with their more
The refiner has a 2020 oil product export sophisticated technologies and economies of
quota of 1mn tonnes, and the source acknowl- scale, are well placed to ramp up their runs next
edged that the company was looking to use this year. Beijing will likely award fuel export quotas
up before the end of the year. to privately owned downstream capacity that
Other sources told Platts that Sinochem meets certain parameters surrounding scale and
intended to export 230,000 tonnes of gasoline in level of technology.
December, up from 170,000 tonnes in Novem- This will leave the smaller, less-efficient pri-
ber, offsetting PetroChina’s planned 40,000 vate players to compete for domestic market
tonne cut in shipments. share, for which they have should an aptitude,
Beijing has consistently increased its crude despite the challenges they have face from state-
import and oil product export quotas and there run rivals. This could have serious ramifications
is little reason to expect 2021 to be different, for South Korean and Japanese refiners, with
given that the private sector is expanding its the latter’s older facilities most at risk from the
downstream presence. increased competition.™

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