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How China's February Data Impact the Crude Oil Tanker Industry

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Part 2
How China's February Data Impact the Crude Oil Tanker Industry PART 2 OF 4

Crude Oil Tanker Industry Benefits from China’s Imports

China’s import-export data

China’s total exports fell 1.3% YoY (year-over-year) in February 2017, which was worse than the 14.0% rise estimated by a Bloomberg survey. The fall in exports indicates a trade deficit for the country for the first time in three years.

Crude Oil Tanker Industry Benefits from China&#8217;s Imports

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On the other hand, China’s imports rose 38.1% YoY in February 2017. That’s the highest rise since February 2012. In January, imports rose 16.0%. February imports were better than analysts’ expectations of a 20.0% rise.

China’s crude oil imports for February

China’s crude oil imports have hit a record with the second highest monthly imports in February. Its total crude oil imports came in at 31.8 million tons compared to 34.0 million tons in January. On a daily basis, February imports were ~8.3 million barrels per day, which was 2.5% higher year-over-year and higher than 8.0 million barrels per day in January 2017.

According to a Bloomberg report, Li Yan, an analyst with oil consultant Zibo Longzhong Information Group, said, “Teapots have been the main driver of strong oil imports in January and February. Chinese crude oil buying wrapped up 2016 with a record and the momentum will continue this year as we expect private refiners to keep high run rates.”

Why China’s imports are crucial

China (FXI) (MCHI) imports most of its oil by sea. Typically, higher crude oil imports mean higher crude oil tanker demand, and higher tanker demand translates to higher tanker rates.

Higher tanker rates benefit crude oil tanker companies such as Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), DHT Holdings (DHT), Gener8 Maritime (GNRT), Navios Maritime Midstream Partners (NAP), and Euronav (EURN).

In the next part of this series, we’ll take a look at China’s broader economic health.

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