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Day: February 10, 2021

3 posts

* China GDP up 6.5% y/y in Q4, vs Q3’s 4.9%

* 2020 growth at 2.3%, lowest in more than four decades

* Recovery seen gaining further steam in 2021

* Leaders rule out policy u-turn amid pandemic (Adds details, context)

BEIJING, Jan 18 (Reuters) – China’s economy grew at a faster-than-expected pace in the fourth quarter of last year, ending a rough coronavirus-striken 2020 in remarkably good shape and remained solidly poised to expand further this year.

The gross domestic product (GDP) expanded 6.5%, data from the National Bureau of Statistics showed on Monday, faster than the 6.1% forecast by economists in a Reuters poll, and followed 4.9% growth in the third quarter.

GDP grew 2.3% in 2020, the data showed, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

Aided by strict virus containment measures and policy stimulus, the economy has recovered steadily from a steep 6.8% slump in the first three months of 2020, when an outbreak of COVID-19 in the central city of Wuhan turned into a full-blown epidemic.

The world’s second-largest economy has been fuelled by a surprisingly resilient export sector, but consumption – a key driver of growth – has lagged expectations amid fears of a resurgence of COVID-19 cases.

Data on Thursday showed Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger yuan made exports more expensive for overseas buyers.

Despite the steady recovery in quarterly growth, 2020 GDP growth was the weakest pace in more than four decades.

The slew of bright economic data has reduced the need for more monetary easing this year, leading the central bank to scale back some policy support, sources told Reuters, but there would be no abrupt shift in policy direction, according to top policymakers.

Source: reuters.com

* 2020 crude imports +7.3% on yr at record

* low oil encouraged commercial stockpiling, refinery demand

* 2020 natgas imports +5.3% at record, Dec at record on harsh winter (Adds fuel exports, analyst comment, customs comment on U.S. crude imports)

BEIJING/SINGAPORE, Jan 14 (Reuters) – China’s total crude oil imports surged 7.3% in 2020 despite the coronavirus shock earlier in the year, with record arrivals in the second and third quarters as refineries expanded operations and low prices encouraged stockpiling, data showed on Thursday.

For 2020, the world’s top oil buyer brought in a record 542.4 tonnes of crude oil, or 10.85 million barrels per day (bpd).

The strong flows followed feverish buying from refineries as well as independent storage operators after crude prices plummeted to the lowest in decades earlier in the year, taking advantage of robust domestic demand as the economy quickly recovered from the coronavirus pandemic.

That was down about 15% from a year earlier and also off November’s 11.04 million bpd partly because independent refiners ran out of import quotas following earlier frenzy imports.

Looking forward, arrivals should firm up again following the

release of fresh quotas that were 18% higher than a year earlier under the first round of 2021.

“This, together with increased lifting from state-run refiners, should result in a large increase in crude arrivals in January-February from December levels,” said Chen Jiyao, head of China client advisory for FGE.

Expansions at state-owned refineries and the launch of new facilities by privately owned Zhejiang Petrochemical Corp further boosted China’s appetite for the fossil fuel.

Full year gas imports rose 5.3% to a record 101.66 million tonnes.

Shiptracking data showed earlier China’s December LNG imports soared to a record of over 9 million tonnes, overtaking Japan for the second month in a row as the world’s No.1 buyer.

China’s refined oil products exports were 5.9 million tonnes in December and total 2021 exports amounted to 61.83 million tonnes, down 7.5% from 2019, data showed.

Separately, a Chinese customs spokesman said China’s crude oil imports from the United States rose 88% in 2020 in Chinese yuan terms, in line with what customs data has shown in shipments. (tonne=7.3 barrels for crude oil conversion)

Source: reuters.com

The world’s top oil importer, China, significantly boosted its crude oil imports at the start of the year compared to the end of last year, helping to support global oil demand despite lockdowns in parts of China and many major European economies.

China’s oil imports are estimated to have jumped by more than 32 percent in January compared to relatively weak December imports on the back of strong buying from independent refiners who started to use their allocated import quotas for 2021. Buying from the so-called teapots, which account for around a fifth of Chinese total imports, had slowed down toward the end of 2020 as many of the refiners based in the Shandong province had already used up their quotas earlier in the year, taking advantage of the lowest prices in years to stock up on low-priced crude.

The strong imports in January 2021 compared to December 2020 are helping to support global oil demand at a time when lockdowns in Europe, and in some cities in China, are weighing on transportation fuel consumption.

China’s January crude oil imports are estimated to have reached around 12 million barrels per day (bpd) by Refinitiv Oil Research on data from ports and tanker-tracking. That’s 32.4 percent higher than the 9.06 million bpd imports in December.

Chinese oil imports at the start of 2021 are mostly the result of short-term factors such as the start of 2021 import quotas for independent refiners, Reuters columnist Clyde Russell says in a recent column.

Even if import quotas provide only a temporary boost to China’s incentive to increase crude oil buying, the fact that the world’s top oil importer significantly raised imports despite the higher oil prices since November is supportive for the oil market and oil prices.

So Chinese demand continues to support the prices at the start of 2021, after having done so for most of 2020 with record imports, while demand in major mature economies was crashing.

Refining throughput also hit a record in China last year, as major new facilities entered into service. After a pandemic-hit slow start to 2020, China’s refiners boosted production from April, thanks to ultra-low crude oil prices and a rebound in the Chinese economy and fuel demand, setting a new record for crude oil processing volumes. Crude oil throughput at China’s refineries averaged 13.51 million bpd in 2020, a 3.2-percent increase over the previous year, according to data from the National Bureau of Statistics.

At the start of 2021, strong Chinese crude oil imports are adding to a rebound in imports in other major importers in Asia—particularly India, South Korea, and Japan—to support global demand and prices, on top of the continued cuts from OPEC+ and the additional 1-million-bpd cut from Saudi Arabia in February and March.

Asia’s crude oil imports are estimated to have jumped by 7.5 percent in January compared to December, tanker-tracking and port data compiled by Refinitiv showed.

Related: Why China Can’t Replicate America’s Shale Boom

“Saudi production cuts combined with strong Asian demand have, despite lockdowns and reduced mobility, started to bite with the backwardation in Brent rising to a one-year high, a sign that large stockpiles are shrinking fast. Also, in China, the recent liquidity squeeze may be over for now thereby reducing demand risks from the world’s biggest importer,” Saxo Bank strategists said on Tuesday.

Going forward, the pace of Chinese imports will depend on its policies for stockpiling, considering the higher oil prices this year, and on the import tactics of the independent refiners, who typically prefer to use up the quotas ahead of the deadlines and stock up on crude.

The pace of the Chinese economic growth will also play a role. In the fourth quarter, China’s economy expanded more than forecast, by 6.5 percent year over year. The full-2020 economic growth of 2.3 percent was the lowest in more than 40 years. Still, China was the only major economy to avoid economic contraction last year. The International Monetary Fund (IMF) expects China’s economy to grow by 8.1 percent in 2021.

The forecast strong economic growth this year could further drive up Chinese oil demand, oil imports, and, eventually, global oil prices.

Source: Oilprice.com