China’s crude oil refining marked an impressive surge of 17.4 percent in July compared to the same period last year, as reported by the National Bureau of Statistics (NBS). The surge in refining activity can be attributed to the robust demand for domestic fuels during the peak summer holiday season
In the wake of this surge, China’s total refining volume, cementing its position as the world’s second-largest oil consumer, reached a substantial 63.13 million tonnes last month.
The surge in refining activity finds its roots in the surge in tourism-related demand for fuels. According to insights provided by the consulting firm Longzhong, the summer tourism season has contributed significantly to the heightened demand for fuel in the country. This surge in demand has been particularly prominent in the case of gasoline and jet fuel. As an indicator of this heightened demand, domestic gasoline inventories witnessed a noticeable decline of approximately 3% between mid-June and mid-July.Amidst this surge in refining activities, the NBS also revealed that China’s crude steel output experienced a slight decline of 0.34% in July compared to the previous month. This dip can be attributed to production restrictions enforced in Tangshan in northern China and Sichuan in the southwestern region.
China, known as the world’s largest steel producer, managed to yield an impressive 90.8 million tonnes of steel in July. This figure, although marginally lower than June’s output of 91.11 million tonnes, still represents a notable 11.5 percent increase when compared to July 2022. Notably, this increase occurred at a time when steel mills had scaled back production due to declining profit margins, a consequence of challenges within the real estate sector that led to decreased demand.
In conclusion, China’s remarkable 17.4% surge in crude oil refining in July stands as a testament to the country’s ability to respond to shifting demands within the energy sector. The interplay between increased tourism-related fuel demand and the nuanced challenges faced by other industries, such as steel production, creates a dynamic landscape that will continue to shape China’s economic and industrial trajectory. As the nation navigates these complex factors, its strategic decisions will likely have a lasting impact on both domestic and global markets.