CHINA DATA: Jan-Sep crude throughput falls 5% to 13.4 mil b/d amid 3% GDP growth

China's crude throughput fell 5.1% year on year over January-September as localized lockdowns to curb COVID-19 outbreaks took a toll on oil demand and the economy, pulling down GDP growth to 3% over the same period, National Bureau of Statistics data released Oct. 24 showed.

The country's third quarter GDP growth rebounded to 3.9% from 0.4% in Q2 as the government stepped up efforts to stimulate the economy, but the GDP growth averaged over January-September remained below the government's annual target of 5.5%.

S&P Global Commodity Insights in mid-October revised down its 2022 GDP forecast for China to 2.7% from 3.3%, saying the country was unlikely to accelerate its pace of reopening in six months, despite aiming to refine its zero-COVID measures to be more accurate and effective, and increasing international flights.

Industrial production, on the other hand, has been on a steady recovery from a 2.9% year-on-year decline in April to a seven-month high of 6.3% in September, the NBS data showed.

The recovery in industrial production, coupled with seasonal demand from harvesting, fishing and construction, supported crude runs in September, which registered the first year-on-year growth, at 1.9%, since December 2021, and hit a four-month high of 13.88 million b/d (56.81 million mt). Crude runs over January-September stood at 13.35 million b/d, or 497.26 million mt.

This is in the line with S&P Global Commodity Insights' estimate throughput of over 13.8 million b/d for September, driven by robust demand for gasoil in autumn and the end of scheduled maintenance, to levels last seen in March, before the widespread imposition of localized COVID-19 lockdowns in Q2.

In September, state-run refineries collectively lifted their utilization rate from 73.5% in August to 80.0%, the highest since March, and the private 800,000 b/d Zhejiang Petroleum & Chemical increased its throughput to a 23-month high, while throughput at the small-scale independent refineries in Shandong edged down 0.3% month on month to 2.13 million b/d, data from S&P Global and local information provider JLC showed.

Sep crude output up 1.4%

In the upstream sector, China crude production rose 1.4% year on year to 16.81 million mt, or 4.11 million b/d, in September, the NBS data showed. Output over January-September rose 3% year on year to 4.13 million b/d.

China's crude output is set to rise slightly in the coming years as President Xi Jinping highly emphasized state security, including the supply security of food, energy and resources, in an Oct. 16 speech at the opening of the Chinese Communist Party's 20th National Congress in Beijing.

However, "China's crude output would peak in 2025, when its offshore hits a plateau, as the onshore reserves are unlikely to fully compensate for the output loss in the aging flagship oil blocks Daqing and Shengli," a Beijing-based analyst with an international consultancy said.

CNOOC, the offshore giant and top contributor to China's crude production growth, targets reaching peak output at (1.2 million b/d) in 2025, representing a growth of 8.6% over 2022-2025.

S&P Global projects China's crude production to rise more than 3% to 4.1 million b/d in 2022 and a further 2% in 2023 to 4.2 million b/d.

China's crude output, throughput

(Unit: million mt)

Source: National Bureau of Statistics