China's August Trade Data Impacted the Crude Tanker Industry

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Part 2
China's August Trade Data Impacted the Crude Tanker Industry PART 2 OF 4

China’s Crude Imports Fell in August

China’s import and export data

China’s total exports in dollar terms rose 5.5% YoY (year-over-year) in August 2017, which was lower than July’s rise of 7.2%. In August, China’s imports in dollar terms rose 13.3% YoY, which was higher than July’s rise of 11% YoY. July’s imports were better than expected, but the exports missed consensus estimates.

China&#8217;s Crude Imports Fell in August

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August’s crude oil imports

In July, China’s crude imports fell to the lowest level in the previous seven months. In August, crude oil imports fell again and hit an eight-month low. In August, China’s crude oil imports were 33.98 million tons—down from 34.6 million tons in the previous month. August’s crude imports were 3.4% higher year-over-year. On a daily basis, China imported 8 MMbpd (million barrels per day)—compared to 8.18 MMbpd in July.

Why did imports fall?

According to Reuters, in July and August, China’s independent refineries, also known as “teapot refineries,” carried out planned maintenance work—just before the peak demand season in September and October. Some of the refineries were also closed for a longer period due to safety issues detected by the government’s environmental authorities.

First eight months

In the first seven months of 2017, crude oil imports rose 12.2% from the same period last year to 281.05 million tons. On a daily basis, China imported 8.44 MMbpd from January to August 2017.

China’s crude imports

China imports most of its crude oil using crude oil tankers. Typically, higher crude oil imports mean higher crude oil tanker demand. Higher crude tanker demand translates to higher rates for tankers.

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

Next, we’ll take a look at China’s broader economic health.


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