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Platts Report: China Oil Demand Declined 1.9% in December 2013 from Prior Year

Apparent Demand Contracted for Second Consecutive Month on Muted Refining Activity

SINGAPORE, Jan. 27, 2014 /PRNewswire/ -- China's apparent* oil demand in December 2013 fell 1.9% to an average 10.11 million barrels per day (b/d) or 42.76 million metric tons (mt) versus prior year data, according to a Platts analysis of China's latest government data.

December was the second consecutive month that China's apparent oil demand contracted and marked the third monthly decline this year, behind November's 2.1% decline and September's 2.3% drop.

The dip in apparent oil demand last month was evidenced by relatively lower refining activity and a significant drop in net oil product imports. As reported by the National Bureau of Statistics on January 20, crude oil processing by refineries was down 0.2% versus a year ago to 9.94 million b/d.

In 2013, China's apparent oil demand rose 2.5% versus the prior year to 9.83 million b/d. This was the same rate of expansion for the same period in 2012 versus 2011.

"China's total apparent oil demand has slowed in the last two years, closely following the slowdown in economic expansion," said Song Yen Ling, Platts senior writer for China. "Gross domestic product growth in 2012 and 2013 was 7.7%, down from 9.2% in 2011 when apparent oil demand growth was 6.7%."

Oil Products Consumption Dips in December

Oil product imports in December slumped 18.8% year over year to 3.38 million mt. Oil product exports rose 4.8% versus a year ago to 2.64 million mt, according to General Administration of Customs data released January 10.

"Most notable is the weakness in gasoil demand, which contracted last month by 1.5% on a year-over-year basis to 14.52 million mt and marked the fourth consecutive month of decline in gasoil apparent demand," said Song. In China, gasoil is primarily used in the industrial, construction and heavy transport sector.

For 2013 as a whole, apparent demand for gasoil contracted 0.6% to 170.22 million mt. Exports of the fuel jumped 50.3% from 2012 to 2.78 million mt, while imports plunged 71% year at an annual rate to 270,000 mt, the lowest volume in at least a decade. Domestic output of gasoil totaled 172.73 million mt in 2013, up 0.3% from a year earlier.

Consumption of fuel oil also fell last year due to a combination of lower bunker fuel demand and independent so-called "teapot" refineries in China using more crude oil as feedstock instead of typical supplies of imported 180 centistroke straight-run fuel oil.

Meanwhile, 2013's apparent demand for fuel oil contracted 2.9% annually to 37.69 million mt. Despite last year's 8.3% rise in domestic production from 2012 to 25.57 million mt, net imports slid 20.1% on an annual basis to 12.12 million mt, the lowest yearly level in a decade.

In terms of gasoline, apparent demand remained strong last year, driven by higher demand from the transport sector. Gasoline output rose 9.5% from 2012 to 98.33 million mt, more than making up for a 60.6% year-over-year increase in exports to 4.69 million mt. This brought apparent demand to 93.64 million mt for the year, up 7.2% from 2012. China does not import gasoline.

MONTHLY TRADE DATA:


Dec '13

Dec '12

% Change

Nov '13

Oct '13

Sep '13

Aug '13

Net crude imports (million mt)

26.69

23.59

+13.1

23.46

20.30

25.61

21.22

Crude production (million mt)

17.90

17.74

+0.9

17.28

18.07

16.88

17.3

Apparent demand (million mt)

42.76

43.58

-1.9

40.88

41.59

39.55

39.82

Apparent demand ('000 b/d)

10,111

10,305

-1.9

9,988

9,834

9,663

9,416

Sources: China's General Administration of Customs, National Bureau of Statistics, Platts

Month-to-month demand in China is generally viewed to be subject to short-term anomalies which are of interest and important to note, but which often fail to reveal the country's underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country's energy profile.

*Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.

Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the widely-accepted benchmark for markets East of Suez.

For more information on crude oil, visit the Platts website at www.platts.com.

For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets.  Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency.  Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coalelectricityoil, natural gasmetalsnuclear powerpetrochemical, shipping and sugar markets.  A division of McGraw Hill Financial (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.

SOURCE Platts

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