Record Oil Imports Lead China Energy Recovery as Lockdowns Ease

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 leasttwo dozen tankers on China’s east coast were awaiting to discharge earlier this month.
  • The nation’soil 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. Aprivate 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 hastightened 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
    • LNG shipments likelyincreased last month as buyers took advantage of cheaper spot prices, though deliveries by pipeline are expected to remain sluggish

    — With assistance by Jing Yang, Sarah Chen, and Jason Rogers

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