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Abu Dhabi, UAESunday 24 June 2018

China issues first batch of crude oil import quotas for 2018

Imports are expected to hit another record in 2018 as new refining capacity is brought online

China has issued crude oil import quotas totalling 121.32 million tonnes for 44 companies in its first batch of allowances for 2018, according to a source with direct knowledge of the matter and documents reviewed by Reuters on Thursday. State-owned ChemChina has the largest quota at 16.67 million tonnes, followed by North Huajin Chemical Industries Group with 7.47 million tonnes, the documents showed. China's imports are expected to hit another record in 2018 as new refining capacity is brought online and Beijing allows more independent refiners to import crude, with their robust demand growth helping to support global oil prices. The total allocated volume of the first batch of quotas equates to 2.43 million barrels per day. The commerce ministry in November said it had raised the 2018 crude oil import quota for "non-state trade" to 142.42 million tonnes. The ministry said in November the quotas would be issued in batches, with the first lot based on companies' actual purchases during the January to October period this year. China's commerce ministry could not be reached for comment on the first batch of 2018 quotas. China has surpassed the United States this year to become the world's biggest importer of crude oil.

China's state planner on Friday granted another independent refiner, Jiangsu Xinhai Petrochemical Company, a preliminary crude import quota of 2.3 million tonnes for 2018, indicating it could continue to allow more companies to import crude. Beijing could also allocate more quotas to two new refineries built by Dalian Hengli Petrochemical and Zhejiang Rongsheng when they come on line next year, Chinese trade sources said. Among independent refiners, Haiyou Chemical's allocation for 2018 tripled from this year, while Shandong Wonfull Petrochemical's quota nearly doubled, according to Reuters data. Chambroad Petrochemical, Baota Petrochemical and Sinochem Hongrun can also import more crude next year. Beijing issued quotas to independent refiners for 2017 totalling 93.2 million tonnes, about 22 per cent of China's imports for the year at 421.5 million tonnes, according to Reuters data and estimates by Thomson Reuters Supply Chain and Commodities Research. Independent refiners imported about 64 million tonnes of crude in the first 11 months this year, estimates by the research team showed. State oil companies and their refining and trading subsidiaries will have a quarter of the crude import quotas for 2018, the documents showed. The quotas do not apply to China's five state-owned major oil companies such as PetroChina and Sinopec, which are allowed to import crude freely.