China's June crude imports soar 45.3% year over year as inventories build

Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song/File Photo Acquire Licensing Rights

BEIJING, July 13 (Reuters) - China's crude oil imports in June jumped 45.3% on the year to the second-highest monthly figure on record, customs data showed on Thursday, with refiners building up inventories despite tepid domestic demand.

Crude imports in June totalled 52.06 million metric tons, or 12.67 million barrels per day (bpd), the data from the General Administration of Customs showed.

It was a substantial increase on the 8.72 million bpd imported in June last year, when the economy was battered by widespread COVID-19 lockdowns.

Crude imports also held their upward momentum on a month-on- month basis, up 4.58% from May's 12.11 million bpd.

Total imports for the first half were 282.07 million metric tons, up 11.7% from 252.52 million in the corresponding period last year.

Teapot refiners in the eastern province of Shandong stepped up runs as authorities lifted curbs on the import of diluted bitumen in late June, helping to ease inventory pressure at its ports.

More broadly, however, inventories continue to rise against an uncertain macroeconomic backdrop. Commodities consultancy Vortexa estimated onshore crude inventories at 980 million barrels at the end of June, just 20 million barrels below an all-time record in August 2020.

While kerosene demand is up strongly on the year, boosted by a resumption in flights after the removal of curbs on travel, weakness in the manufacturing and property sectors has hurt demand for diesel, despite government stimulus measures.

"The long-haul spot barrels were booked when (arbitrage) windows were open, despite soft demand when the cargos arrived in June," said Emma Li, a China oil markets analyst at Vortexa in Singapore.

China imported 10.39 million metric tons of natural gas in June, up 19.2% from 8.72 million a year ago when importers cut spot purchases amid high global liquefied natural gas (LNG) prices. Total gas imports for the first half stood at 56.63 million metric tons, a 5.8% increase on last year.

Refined fuel exports rose 40.6% to 4.51 million metric tons from 3.21 million in June last year, but down from the previous month's 4.89 million metric tons.

Reporting by Andrew Hayley; Editing by Himani Sarkar, Shri Navaratnam and Jamie Freed

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Andrew reports on energy and energy policy in China. He previously worked in investment banking in London, covering European high-yield debt transactions. Andrew speaks Mandarin and is learning Russian.