CHINA'S monthly crude oil imports jumped 25 percent in March to a record high, customs data showed yesterday, but analysts say such a surge can't be sustained.
March crude imports rose to 17.3 million metric tons, or 4.1 million barrels per day, versus 13.86 million tons a year earlier, according to China Customs. Imports are up 15 percent in the first quarter while the import bill leapt 91 percent to US$30 billion in the same period.
The surge came as state-owned Sinopec and China National Petroleum Corp have to run at full capacity to ease a domestic fuel shortfall, while independent refineries cut output to avoid refining losses amid surging crude costs.
"That's mainly because of Sinopec's and CNPC's heavy buys, but the 25-percent surge should not last as refining is still losing money," said an analyst at an industry consultancy.
A Reuters report said that Unipec, Sinopec's trading arm, emerged last week as a rare seller on the spot market for April and May-loading African and Mideast crude, signaling it may have overbought ahead of heavy maintenance in the second quarter.
China's oil-product imports climbed 14 percent to 9.08 million tons in the first quarter while exports fell 5.6 percent to 3.61 million tons.
To help the struggling refining sector while not raising fuel prices sharply amid high inflation, China is considering ways to encourage oil processing. Besides granting subsidies, the government also reportedly plans to slash by three-quarters the 17-percent value-added tax that companies pay on crude imports.
Still, analysts say refineries can find some relief with the rising yuan, which broke through seven to the US dollar, in which crude is traded, for the first time on Thursday since its revaluation in July 2005.
Separately, China National Offshore Oil Corp said it will open 17 blocks with total area of 45,817 square kilometers in offshore China for joint oil exploration with foreign companies this year.