Implied demand in April reached 12.86 mb/d, up y/y by 0.50 mb/d (4%) despite a weakening economic outlook. Actual demand (adjusted for stock changes) was likely higher than implied data suggest, at 13.06 mb/d (+0.50 mb/d y/y) as refiners usually destock during maintenance.
Apparent gasoline demand reached 3.46 mb/d in April, 0.20 mb/d (6.2%) higher y/y on warm weather and increased driving during the Qingming Festival (in early April) and as retailers stockpiled ahead of the Labour Day Holiday, which this year spanned four consecutive days instead of three. But gasoline demand growth is slowing, which will lead to higher exports.
Chinese apparent diesel demand reached 3.32 mb/d in April, lower y/y by 0.23 mb/d and while this is at odds with anecdotal reports of improved demand on infrastructure work and industrial activities, it aligns with NDRC Q1 19 data, which sees diesel demand down y/y by 4.1%.
China’s crude imports in April reached a record high of 10.67 mb/d (+1.04 mb/d y/y), mainly due to the arrival of Iranian volumes. Buying was also supported by the 3 percentage point (ppt) VAT cut which took effect on 1 April, teapot buying to exhaust licences, new plants ramping up and state-owned refiners stocking up in anticipation of rising prices in H2 19.
China was a net importer of products in April after being a net exporter in March, led by imports of diesel (+58 thousand b/d y/y) and fuel oil (+40 thousand b/d y/y). Exports were led by diesel—diesel exports were at a fresh record high, of 0.65 mb/d (+42.8%)—while gasoline exports fell y/y.
Crude production in April was up y/y by 48 thousand b/d at 3.83 mb/d, boosted by output from the South China Sea, the Changqing and Yanchang oil fields (Shaanxi province), and new reserves in Xinjiang. Chinese crude production is set to average 3.8 mb/d for 2019.