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China's crude oil imports will slow down this year, according to forecasts from the Ministry of Commerce (MOFCOM) released yesterday.
The ministry figures estimate the country will need to import 130 million metric tons of crude oil this year, a year-on-year increase of just 6.5 percent over 2004.
In contrast, last year's imports of 122 million tons of crude oil represented a year-on-year rise of 34.68 percent over 2003.
China is the world's second largest energy consumer after the United States, with its imports this year estimated to account for 6.8 percent of the world's total crude oil trade volume, the ministry said in a statement.
"Because of soaring oil prices on the world market, demand for refined oil (such as gasoline and diesel) has decreased, so crude imports are expected to continue to slow down in the second half of the year," it said.
China imported 63.42 million tons of crude oil in the first six months of the year, a year-on-year growth of 3.9 percent.
Industry analysts attributed the lower import growth to skyrocketing oil prices on the world market, and the slow growth in oil refining capacity as well as increased stockpiles from last year.
Gong Jinshuan, a senior analyst with the country's largest oil producer China National Petroleum Corp (CNPC), said surging crude prices have squeezed the country's demand, although a recent 2.1 percent renminbi appreciation has indicated a stronger purchasing ability for China's domestic consumers on the world market.
Crude oil delivery prices in September rose 0.5 percent to US$62.19 a barrel on the New York Mercantile Exchange yesterday, only 11 cents off an all-time high of US$62.30 set three days ago.
A slowdown in the increase in China's domestic demand is a primary reason for the reduced growth in oil imports, said Gao Shixian, with the Energy Research Institute of the National Development and Reform Commission.
In a move to cool down the country's overheating steel and property industries, China has introduced a raft of measures to restrict industrial expansion and energy consumption.
According to the Beijing Statistics Bureau, the capital's real estate investment in the first half of the year was about 52.98 billion yuan (US$6.4 billion), 16.1 percent lower than the same period last year.
MOFCOM previously predicted the country would need 310 million tons of crude oil this year, up 6 percent year-on-year.
China itself will produce 180 million tons of crude this year, 3 percent more than last year.
The country consumed 297 million tons of crude last year, an increase of 14 percent from 2003.
The slowdown in oil refining will also cut oil imports, Gong said.
"The high oil prices on the world market have reduced market demand for refined oil, and there is limited room for the country's refiners to increase facilities," Gong said.
Another reason for slower growth in oil imports, noted Gong, is the increased oil stockpile.
China had 7 to 8 million tons more crude in storage by the end of 2004 compared with 2003, enough to supply oil refiners for one month. The 2003 crude stockpile could only support 10 to 20 days of oil refining, said Gong.
China's top government officials have previously insisted the country's large oil imports are not a cause of the high crude prices.
(China Daily August 4, 2005)
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