In Freight News 08/04/2015
Even with global oil prices remaining low, China has slowed down oil imports as most domestic oil storage facilities have been filled to capacity, according to the website of Shanghai’s China Business News.
National Bureau of Statistics show that China’s crude oil imports topped 53.53 million tons in the first two months this year, up 4.5% year-on-year, compared with 9.45% growth for entire 2014. The import value of crude oil nosedived 43.8% year-on-year in the period.
The slowing of import growth contrasts with hefty growth since the second half of 2014, as the government intended to build up strategic oil reserves, taking advantage of the low global price.
China started to build oil storage facilities in 2003, according to a plan which calls for the setup of strategic oil reserves in three stages during a 15-year period, including storage facilities with annual capacity of 10-12 million tons, equivalent to 30 days of net oil import, in the first stage and 28 million tons of storage capacity for both the second and third stage. The first-stage facilities were already completed in 2009, while construction of the second-stage facilities is still underway and the third-stage facilities, scheduled for completion by 2020, are on the drawing board.
Li Li, general superintendent at CBI Research & Consulting, noted that the government appears to be rethinking the plan for strategic oil reserves, in view of the major changes taking place on the global market.
In a reversal of their initial enthusiasm, many local governments have become lukewarm in having national strategic oil storage facilities built in their jurisdiction, aware of the limited benefits for themselves. As a result, progress for the building of second- and third-stage storage facilities has apparently slowed down.
