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China Crude Imports Plunge To December 2011 Levels

Tyler Durden's picture


Following months of ever higher Chinese imports, no doubt predicated by stockpiling and hoarding reserves, in June Chinese crude oil imports plunged from over 25 million metric tons to 21.72 MMTs, the lowest since December, or about 5.3 million barrels a day, down over 10% from the previous month's record import. While the number was still quite higher than the 19.7 million tons, the sudden drop is concerning, especially since the price of Brent slid materially in June, and if anything should have resulted in even more imports if indeed China was merely stockpiling crude for its new strategic reserve facilities. Which begs the question: was the demand actually driven by the economy, and just how bad is the economic slowdown over the past month if not even stockpiling at preferential prices can offset the drop in end demand?

From Dow Jones:

China's refineries may process less crude in the third quarter due to weaker domestic demand for diesel, which has led to persistently high stockpiles and steady exports from the country's largest refiner, China Petroleum & Chemical Corp, or Sinopec Corp.


The country's crude throughput declined in both April and May, falling 0.3% and 0.7%, respectively, compared with the corresponding months a year earlier.


Weaker demand for diesel, a primary driver of refinery output, has tracked China's economy, which has slowed for five consecutive quarters. Manufacturing activity in June grew at its slowest pace since November.


High diesel inventories have led Sinopec's trading arm, China International United Petroleum & Chemicals Co., or Unipec, to export due to insufficient storage space, said a Beijing-based trader familiar with the matter.


Meanwhile, independent refining rates in eastern Shandong province were at 30.3% as of July 5, up 4.6 percentage points from a week earlier but still down 14.7 percentage points from a year earlier, Shandong-based energy consultancy Oilchem.net said. The majority of independent refineries are located in Shandong.


China's refined oil product imports in June totaled 2.93 million tons, while exports totaled 2.07 million tons, the data showed.

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Tue, 07/10/2012 - 09:25 | 2601726 Sudden Debt
Sudden Debt's picture

I'm telling yah, those Dylithium crystals in cars are doing a bang up job!



Tue, 07/10/2012 - 09:29 | 2601739 t_kAyk
t_kAyk's picture

I'm working on a flux capacitor.  It runs on garbage, so as long as the TOTUS keeps on-a spewing my energy crisis is over! 

Tue, 07/10/2012 - 09:29 | 2601744 SheepRevolution
SheepRevolution's picture

The shit seems to get more real by the day now..

Tue, 07/10/2012 - 09:32 | 2601749 MillionDollarBonus_
MillionDollarBonus_'s picture

Once again, China proves that thy are unable to replace the American consumer. Their attempts to make the transition to a consumer economy have been futile, largely due to their inferior appetite. They are currently paying the price for breaking their symbiotic relationship with America. China is much better off purchasing our treasuries and exporting goods to our consumer economy. It's a win-win for both nations: Americans get to buy cheap Chinese goods, and the Chinese get to add to their safe-haven treasury reserves.

Tue, 07/10/2012 - 09:38 | 2601775 Temporalist
Temporalist's picture

Here is the AnAnonymous version....very similar:

Once again, China proves that thy are better than the American consumer(ism). Their attempts to make the transition to a consumer(ism) economy have been futile, largely due to their inferior appetite. They are currently paying the price for breaking their symbiotic relationship with American (consumerism). China is much better off purchasing treasuries and exporting goods to our consumer(ism) economy. It's a win for China: American consumerism buys cheap Chinese goods, and the Chinese get to add to their safe-haven treasury reserves.

Tue, 07/17/2012 - 23:19 | 2626847 MeelionDollerBogus
MeelionDollerBogus's picture

Confucious say American Citizenism copying (and copyrighting) makes best flattery in economic collapse.


What can I say, none of us has quite the zing of a truly dedicated Chinese citizen making zerohedge replies.

Tue, 07/10/2012 - 09:51 | 2601833 moskov
moskov's picture

HAHA....So you are expecting turing around a giant economy into a different direction only takes 5 secs? Thanks God we don't have OBAMA THE CHANGE ruling China's economy.

Tue, 07/10/2012 - 12:26 | 2602498 bankruptcylawyer
bankruptcylawyer's picture

first time you had a funny one in a while.

Tue, 07/10/2012 - 10:21 | 2601941 trilliontroll
Tue, 07/10/2012 - 09:28 | 2601737 pods
pods's picture

I wonder if this ties in with the China investing in Iranian oil fields?  

Maybe China stopped buying the milk because they are now going to buy the dairy farm?


Tue, 07/10/2012 - 09:54 | 2601831 Manthong
Manthong's picture

Don'f forget about Africa and South America.

Their SPR concerns might be greatly alleviated if they secure reliable direct trade with the right few sources - and it looks like they have a number sources lined up now.

Tue, 07/10/2012 - 10:00 | 2601858 DeadFred
DeadFred's picture

I wonder why people even bother to wonder about China. It's such an opaque system with all the official spin and unofficial CYA reporting by underlings I doubt the poliburo even knows what's going on. They throw you in jail over there if you're caught investigating numbers (state secrets and security after all). I understand how important their economy is to the world but get over it, you can't trust any of the data that leaks out of that black box.

Tue, 07/10/2012 - 10:09 | 2601902 pods
pods's picture

I guess I know what it is like to toss out a pretty solid serve and have it ripped back down the line for a winner?



Tue, 07/10/2012 - 09:32 | 2601750 Zola
Zola's picture

I apologize for this threadjacking but the sheer utter human rubbish of these TSA agents is making my blood boil: http://www.infowars.com/tsa-agents-laugh-at-deaf-man-call-him-fing-deafie-steal-his-candy/

Tue, 07/10/2012 - 09:44 | 2601799 pods
pods's picture

That is par for the course when the state knows no bounds on the power it wields.

The other incident down in the article was even worse.  

The pressure builds with every episode, and when this blows, it will be mighty.


Tue, 07/10/2012 - 10:35 | 2601995 Randall Cabot
Randall Cabot's picture

Alex Jones is a clown....a dishonest, dangerous clown.

Tue, 07/10/2012 - 12:27 | 2602506 bankruptcylawyer
bankruptcylawyer's picture

I agree, but you realize there is some good information on his website. 1 in 10 articles is useful, unlike the msm. 

you just have to know how to pick and choose. 


Tue, 07/10/2012 - 10:42 | 2602041 Overfed
Overfed's picture

It would be nice to see that reported somewhere other than Infowars.

Tue, 07/10/2012 - 09:32 | 2601751 icanhasbailout
icanhasbailout's picture

These ain't preferential prices, they're still above even the Saudi's own targets.


When oil is trading at $40/bbl again those will be somewhat preferential prices.

Tue, 07/10/2012 - 09:34 | 2601760 Oh regional Indian
Oh regional Indian's picture

China is pretty full up on Crude is what I hear. Crude oil now, that is a whole other matter.

Here is a DeBonoesque thought. What if they've designed the next big thing in propulsion and it does not need oil?

I have ;-) So I know it's possible.

We should all be prepared for a less crude future anyways. Too much oil moves by sea, through "protected" waterways. Easily manipulated, choked, blown up. All those naked pipelines too.



Tue, 07/10/2012 - 09:39 | 2601781 MFL8240
MFL8240's picture

How is this possible when Obama said everything was getting better.  Better wake up America.

Tue, 07/10/2012 - 09:56 | 2601841 TWSceptic
TWSceptic's picture

I think he meant everything is getting better for government employees and food stamp collectors.

Tue, 07/10/2012 - 09:59 | 2601830 TWSceptic
TWSceptic's picture

Lower commodity prices means gold at a discount soon, unless there's safe haven demand in Europe which for now I doubt.

Tue, 07/10/2012 - 09:52 | 2601835 RobotTrader
RobotTrader's picture

Crashing oil prices = tax cut for the consumer


Dow Transports on the verge of breaking out of a 6 month trading range and head to new highs.

Tue, 07/10/2012 - 09:54 | 2601842 RobotTrader
RobotTrader's picture

Harley Davidson up 3% already, the consumer is ebullient about lower gas prices, food prices cut by 1/3 in the last 6 months, more money to spend on toys.

What happened to Peak Oil?

Oh, now its "Peak Prosperity"!


Tue, 07/10/2012 - 11:24 | 2602230 michael_engineer
michael_engineer's picture

PP for short.

Tue, 07/10/2012 - 10:08 | 2601899 mess nonster
mess nonster's picture

Sorry to pop the bubble, but the downturn looks like just another cycle in a long-term up-trend. I would draw the long-range support on this graph at 20. Looks like up, up, and away to me... until the current "Peak Oil is a myth!" mania is broken by a combination of incontrovertable evidence that the only petroleum Saudi Arabia has left is 90 weight gunk, sucked out of the very bottom of their petraquifer, and the inevitable capital sieze-up that will put the bakken permanently out of reach for all time.

Got mules?

Tue, 07/10/2012 - 10:59 | 2602132 trilliontroll
Tue, 07/10/2012 - 11:09 | 2602170 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Interesting chart. There are two possibilities:

1) it turns around and goes back up. I consider this unlikely since we got a global recession coming/going on

2) it drops to something like 18. Until then I would short oil and revert to long once at 18.

Tue, 07/10/2012 - 11:31 | 2602285 michael_engineer
michael_engineer's picture

Dylithium crystals, flux capacitors? Let's not forget miracles, "The Force", karma, wishing on a star, clicking our heals three times, knocking on wood, stepping on cracks. Anybody got more?

Tue, 07/10/2012 - 11:41 | 2602327 gdogus erectus
gdogus erectus's picture

Am I missing something?  Is this a real chart?  Because if it is, then it's showing that oil imports into China only took a 6-month breather in '08 and has been off to the races ever since.  And the "imports plunge!" headlines show noise.  Right?  I mean, don't get me wrong.  I'm right there with everyone else that China is in a bubble but this chart isn't making me feel any more confident about that conclusion.

Tue, 07/10/2012 - 15:10 | 2602595 steve from virginia
steve from virginia's picture


It's too soon to know whether there is a secular change in China imports or not.

A secular change would reflect a breakdown in China finance and capital flows (from the US and elsewhere).

China must export goods to earn imported hard currencies. These currencies are then used to import fuel.

Either China has diminished fuel demand or it cannot obtain hard currencies. If it is the latter, it does not matter if China has demand or not, it won't get the fuel.

With regards to China and external capital: China is a large version of Greece with better chop suey and uglier buildings.

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