Record Oil Imports Lead China Energy Recovery as Lockdowns Ease

(Bloomberg) -- Crude oil led a recovery in China’s energy imports, rising to a record and feeding a rebound in industrial and consumer activity as restrictions to stop coronavirus infections ease.

• Imports rose to 47.97 million tons in May, or 11.3 million barrels a day, according to customs data Sunday.

Key Insights

• Ship-tracking data show tanker arrivals last month rose to pre-virus levels, as cargoes bought during oil’s crash into the $20s began arriving. At least two dozen tankers on China’s east coast were awaiting to discharge earlier this month.
• The nation’s oil demand in May was almost back to levels seen before the coronavirus triggered widespread lockdowns.
• Energy demand in China has recovered as more businesses and schools reopen. A private gauge of the nation’s services sector activity rebounded in May, adding to evidence that an economic recovery is underway.

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• Coal shipments in May eased from the 27% year-on-year jump during the first four months, supporting speculation that Beijing has tightened import controls to support domestic prices, which fell to three-year low in early May.
  • Inbound cargoes declined to 22.06 million tons last month, down 20% from a year ago
• Natural gas imports rose 3.7% from a year ago at 7.84 million tons
  • LNG shipments likely increased last month as buyers took advantage of cheaper spot prices, though deliveries by pipeline are expected to remain sluggish

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