China’s imports of bulk energy commodities fluctuated

China's imports of bulk energy commodities fluctuated

In the first half of 2021, China’s bulk commodity imports fluctuated. China’s crude oil imports decreased by 3.0% compared with the same period last year, China’s natural gas imports increased by 23.8% compared with the same period last year, and China’s coal and lignite imports decreased by 19.7% compared with the same period last year.

“Since the beginning of this year, the international bulk commodity market prices have shown an overall upward trend. For example, at the end of June, the CRB index reflecting the international market’s bulk commodity prices has increased by more than 25% compared with the beginning of the year, and has more than doubled from the lowest point in the first half of last year. Affected by the increase in international commodity prices, preliminary estimates show that in the first half of this year, my country’s import price index was 108.5 year-on-year, and the contribution rate of price to import growth was 35.4%.” Stated at a press conference on the import and export situation in the first half of the year held by the Information Office of the State Council.

Decline in crude oil imports

According to customs data, from January to June this year, China imported 260.64 million tons of crude oil, a cumulative decrease of 3.0% over the same period last year. The import value was 752.92 billion RMB, a cumulative increase of 16.9% over the same period last year. “This is the first year-on-year decrease in my country’s crude oil imports since 2013. The main reason for this phenomenon is that the continuous increase in international oil prices has greatly increased import costs, which has affected import demand to a certain extent.” Jinlianchuang crude oil analysis Shi Han Zhengji said that the continuous increase in international crude oil prices has increased the value of China’s crude oil imports.

In the first half of 2021, the international crude oil spot price basically follows the trend of the futures market, and the favorable conditions at both ends of supply and demand have become the main factors supporting the rise of oil prices. In the first quarter, while the scale of OPEC+ production cuts remained basically unchanged, Saudi Arabia once again implemented additional production cuts. Coupled with the good prospects for the recovery of global crude oil demand, investors expect that the crude oil market may remain in short supply. “In the second quarter, the oil price rise was limited and once fell. OPEC+ reached a gradual increase in production agreement. Saudi Arabia will withdraw 1 million barrels of additional production cuts in phases. This has put oil prices under pressure in April. With the gradual blockade of the epidemic in Europe and the United States Relaxation, the reopening of the economy, the prospects for fuel demand are good, especially as the northern hemisphere enters the peak demand season in the summer, the rebound in energy demand and the continuous decline in inventories further boosted market optimism. Both OPEC and IEA raised crude oil demand expectations, and oil prices were again supported , It returned to the upward trend in May and June. In addition, the US-Iran talks, which have attracted much market attention, have not yet reached an agreement, and the expected increase in Iranian crude oil exports has been further postponed, which also played a certain role in boosting oil prices.” Masagi said.

Although the sharp rebound in oil prices has led to a year-on-year decrease in China’s crude oil imports for the first time in eight years, in the long run, as China’s economic growth and the expansion of the petrochemical industry continue to drive oil demand, coupled with greater dependence on foreign sources, Han Zhengji predicts that China’s crude oil imports will continue maintain a steady growth trend for a long time.

Increase in natural gas imports

According to customs data, from January to June this year, China imported 59.819 million tons of natural gas, a year-on-year increase of 23.8%, and the import value was 136.24 billion RMB, a year-on-year increase of 9.5%. The increase in imports was more reflected in LNG. According to Zhai Cuiping, an analyst at Zhongyu Information, there have been frequent cold waves this year. In January and February, the temperature in most parts of the country dropped sharply, and there were frequent rain, snow, and fog. The demand for urban fuel storage and residential heating increased sharply. LNG peak shaving to ensure supply the task is arduous, and imports have increased substantially. As the temperature rebounded in March and the heating season ended, residential heating demand weakened and natural gas imports fell. Although the traditional natural gas consumption season has entered the off-season from April to May, domestic industry and commerce have fully recovered, the demand for gas-fired power generation has increased, the “coal-to-gas” project has continued to advance, and natural gas imports have increased again. From the perspective of import source countries, in the first half of this year, China imported LNG from 24 countries. Among them, Australia still ranked first in terms of import volume, Malaysia ranked second, followed by Qatar, the United States, and Indonesia. The source countries of imported pipeline gas are relatively stable. There are 5 countries in total, namely Turkmenistan, the Russian Federation, Kazakhstan, Myanmar, and Uzbekistan.

Reduced imports of coal and lignite

According to customs data, from January to June this year, China imported 139.561 million tons of coal and lignite, a year-on-year decrease of 19.7%, and the value of imports was 71.76 billion RMB, a year-on-year decrease of 17.3%. From the perspective of coal imports, except for the year-on-year increase in imports in June, the imports in the remaining months have decreased to varying degrees compared with the same period last year.

“Due to the tight supply of coal resources worldwide, the price of imported coal has generally risen sharply year-on-year. However, the total amount of coal and lignite imports in China has decreased in the first half of the year. The fundamental reason is that the amount of imported coal has fallen sharply.” said Xu Yuanyuan, an analyst at Zhongyu Information.

In the first half of 2021, Indonesia will still be the largest source of China’s coal imports, and its exports to China accounted for 60.84% ??of China’s total imports, of which China’s thermal coal imports from Indonesia accounted for 74.36% of China’s total thermal coal imports. At the same time, the import pattern of China’s coking coal is showing a diversified trend. Mongolia is still China’s largest source of imported coking coal. In addition, the United States has emerged as a coking coal, which has begun to account for a large proportion of China’s coking coal imports.

Xu Yuanyuan predicts that from July to August and from November to December in the second half of the year, China’s coal imports will remain at a high level. Generally speaking, the amount of coal imported may increase over the first half of the year.