Implied demand in November reached 12.72 mb/d, higher y/y by 0.33 mb/d and lower m/m by 0.15 mb/d as the economy is decelerating and concerns about the US–China trade war, despite the 90-day ‘truce’, are leading to end-user destocking. Actual demand (adjusted for stock changes) was likely slightly lower than implied data suggest on counter seasonal stockbuilds.
Implied gasoline demand reached 3.59 mb/d—including 79 thousand b/d of mixed aromatics imports and 0.21 mb/d of underreported output—higher y/y by 0.27 mb/d. But with car sales plummeting and demand growth set to weaken, China’s new refineries will create a growing gasoline oversupply in 2019, particularly in H2 19.
Implied diesel demand in November reached 3.98 mb/d—assuming 0.40 mb/d of underreported output in Shandong and 0.19 mb/d of LCO imports—bringing consumption higher y/y by 0.38 mb/d from a low base, supported by strong industrial activity.
China’s crude imports in November surged y/y (+1.42 mb/d) to a record 10.46 mb/d in November, driven by teapot refiners trying to exhaust crude import licences, lower refinery maintenance, and new refineries sourcing crude, though some of the start-ups have since been delayed.
China’s net product imports reached 0.40 mb/d in November, higher y/y by 73 thousand b/d as imports, at 1.57 mb/d, fell y/y by 0.22 mb/d but exports averaged 1.17 mb/d, a y/y decline of 0.30 mb/d. Exports were capped by quotas, but a final round for 2018 and the first 2019 batch suggest strong exports through Q1 19.
Crude production in November reached 3.79 mb/d, falling y/y by 14 thousand b/d and lower m/m, despite recovering output in the South China Sea.