CHINA DATA: Brazil’s crude imports collapse to almost four years in September

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Strong points

Late allocation of import quotas discourages the purchase of Brazilian crude

Chinese independent refineries favor Russian ESPO blend due to shorter trips

Middle East takes 50% January-September market share

Chinese crude imports from Brazil fell 54.7% on the month to their lowest level in four years at 380,000 bpd, or 1.61 million tonnes, in September, according to the latest data published by the General Customs Administration on October 20.

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Weak purchases from independent Chinese refineries were the main reason for the decline in September, with flow unlikely to remain low for the rest of the year, market sources said.

China’s crude imports from Brazil last fell to 1.14 million tonnes in October 2017, according to GAC data.

S&P Global Platts data showed that Chinese refineries imported just 172,000 tonnes of Brazilian crude in September, down sharply 81.4% from August and 94.3% year-on-year former.

Brazil was one of the main suppliers of crude to independent refineries in the country, after Russia and Saudi Arabia, but the inferior quality of imports has led domestic refineries in China to seek alternatives, according to market sources.

“Brazilian crudes are getting dull as the producer keeps the popular Tupi for his own consumption, while sending the less favorable Buzios to China,” one crude trader said.

The long trip of more than 45 days and the delay in allocating crude import quotas also prevented independent refineries from increasing purchases of Brazilian crude for delivery in 2021, refining sources said.

Beijing released the latest batch of crude import quotas for 2021 at 14.89 million tonnes on Oct. 15, two weeks behind expectations.

In addition, “cheap Iranian barrels with shorter travel have eaten up the market share of Brazilian crudes,” the trader said.

Independent refineries delivered about 1.57 million tonnes of Iranian crude in September, almost double the 875,000 tonnes in August, according to data from Platts.

China’s customs data, however, did not show any shipments from Iran in September, as Iranian barrels were reported as Oman, Oman Light, UAE Upper Zakum, Malaysian Nemina Blend, Singma Blend, or Mal Blend, market sources said.

The country’s crude imports from Oman rose 26.7% month-on-month to 4.17 million tonnes in September, imports from the United Arab Emirates rose 13.8% on the month to reach 2.94 million tonnes and Malaysian supplies increased 9.9% to 1.92 million tonnes, according to the GAC date.

Russian shipments on the rise

Chinese imports from Russia are expected to increase in Q4, as short trips for the ESPO blend would allow deliveries by year-end, while allowing independent refineries to use their crude import quotas , said market sources.

The higher distillate yield of the ESPO elbow for diesel production with a lower freezing point also makes it ideal for winter use, according to sources.

Russia shipped 6.14 million tonnes, or 1.45 million barrels per day, of crude to China in September, down 6 percent from August and 17.9 percent year-on-year, according to the reports. GAC data.

Interest in buying from independent refineries for the ESPO blend has increased due to the latest import quota, pushing the premium for December loading cargoes to $ 5- $ 5.7 / bbl from the The month before Dubai’s gross Platts valued at $ 4 to $ 4.5 / bbl for November-loading cargo, Platts reported earlier.

Saudi Arabia remained China’s top crude supplier in September, although shipments fell 1.2% from August to 7.96 million tonnes, or 1.88 million barrels / day, according to the GAC.

The Middle East’s share of the Chinese crude market was 49.9% in the first nine months of 2021. The region’s volumes increased 0.5% year-on-year to 5 , 19 million bpd over the same period.

Latin America’s market share fell to 9.1% between January and September, from 11.5% a year earlier, mainly due to lower shipments from Brazil. The region shipped 951,000 bpd of crude to China in the first three quarters, down 25.4% year on year.

Main China Crude Suppliers (Million Tons):

Sep-21

Sep 20

cash

21st of August

cash

Saudi Arabia

7.96

7.79

2.2%

8.06

-1.2%

Russia

6.14

7.48

-17.9%

6.53

-6.0%

Iraq

4.40

3.65

20.4%

5.84

-24.6%

Oman

4.17

3.64

14.5%

3.29

26.7%

Angola

3.14

3.35

-6.2%

3.28

-4.4%

United Arab Emirates

2.94

3.49

-15.7%

2.58

13.8%

Kuwait

2.38

1.81

31.7%

2.51

-5.3%

Malaysia

1.92

0.44

334.9%

1.75

9.9%

Brazil

1.61

4.50

-64.3%

3.55

-54.7%

Colombia

0.80

0.98

-18.9%

0.68

16.7%

Total

41.05

48.47

-15.3%

44.53

-7.8%

Total * ‘000 b / d

10.03

11.84

-15.3%

10.53

-4.7%

January 21-September

January 20-September

Switch

Saudi Arabia

66.45

63.57

4.5%

Brazil

24.37

33.68

-27.7%

Malaysia

12.17

9.41

29.3%

Total

387.41

415.70

-6.8%

Total * ‘000 b / d

10:40 a.m.

11.12

-6.5%

Source: General Customs Administration


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