China on January 2, highlighted that its first batch of oil import quotas are at a lower volume in comparison to the same batch last year. Yet, it is expected that the volumes are to increase during 2019.
Namely, the Ministry of Commerce issued quotas in a total of 89.84 million tonnes to 58 companies in its first allowances for 2019, according to Reuters’ sources. This is less from the 121.32 million tonnes issued during the first batch of allowances the same period during 2018.
Yet, as quoted by Reuters, Beijing might increase the total volume for this year during the second batch of quotas later in 2019.
Also, the lower the import quotas, the less the crude demand growth for the first half of 2019 in China, the world’s largest oil importer and second-largest oil consumer.
Moreover, Reuters noted that private refiners, commonly known as teapots, have received quotas for 70.65 million tonnes of imports, equal to more than 20% lower than the first batch of quotas issued in 2018.
According to Seng Yick Tee, analyst at Beijing-based consultancy SIA Energy,
Refiners only used 71% of the quotas allocated between January and October 2018, the period that the government used to determine quotas for the first batch of 2019.
In general, the new Chinese refineries are expected to increase crude imports reaching a new record in 2019, adding 630,000 barrels per day of new demand, 7 % higher than last year, according to SIA Energy.
In addition, Dalian Hengli Petrochemical and Zhejiang Petrochemical, which are starting up new refineries in 2019, have each received quotas of 4 million tonnes.
Finally, Dragon Aromatics, a petrochemical producer based in Fujian province, has also received import quota of 600,000 tonnes as it resumes operations at its condensate splitter.
