Analysis of Port Production Trend in 2021: Crude Oil Imports Decide the Right of Speech

In 2020, the import volume of crude oil at China's ports of foreign trade reached a new record high. The coastal ports of Shandong Liaoning contributed 52% of the net increase of foreign trade import, the ports of Zhoushan, Qingdao Rizhao in Ningbo contributed 51% of the net increase.

The increase of crude oil import in port foreign trade is mainly driven by the increase of crude oil processing demand the increase of crude oil reserve. It is predicted that the import of crude oil in China's port trade will continue to improve in 2021, the import volume will be 530 million tons, with a year-on-year increase of 6%. It is suggested that we should continue to increase the construction of crude oil storage capacity the cultivation of trade market, strive to build independent controllable crude oil transportation fleet, effectively guarantee China's energy security, enhance China's discourse power influence in the international crude oil market.

Crude oil imports hit a new high last year

In 2020, China's port crude oil import volume reached 500 million tons, accounting for 90% of China's crude oil import volume in the same period, with a year-on-year increase of 9.1% a net increase of 41 million tons, hitting a record high. 2010 to 2020, the annual net increase will be 0.27 million tons; In particular, during the "13th Five-Year Plan" period, the annual net increase was 36 million tons, exceeding the total crude oil import volume of Tianjin Hebei coastal ports in 2020.

Shandong coastal area is a larger area of growth.

The contribution of Shandong coastal area, Liaoning coastal area Yangtze River Delta region to the net increase of crude oil import in China's port trade ranks the top three. The foreign trade crude oil imports of the above three regions accounted for 37%, 15% 20% of the national total, respectively, contributed 42%, 32% 30% of the net increase of foreign trade crude oil imports of the ports of China, respectively. The proportion of foreign trade crude oil imports in the Tianjin-Hebei coastal area, the southeast coastal area, the Pearl River Delta the southwest coastal area were 7%, 5%, 13% 4%, respectively, their contribution to the net increase of national import was -13%, 0 10%-1%, respectively.

The three major oil import ports accounted for half of the net increase in imports.

In terms of ports, Zhoushan, Qingdao, Rizhao, Dalian, Yantai, Huizhou, Tianjin, Zhanjiang, Quanzhou Yingkou are the top 10 ports in terms of crude oil import in foreign trade.

Among them, the top three ports completed crude oil import of 250 million tons, accounting for 50% of the country's crude oil import, contributing 51% of the net increase of crude oil import in China's foreign trade. The top six ports imported 470 million tons, accounting for 71% of the country's total imports contributing 113% of the net increase. The contribution of Tianjin, Quanzhou Yingkou to the net increase of foreign trade import is negative.

Growth has been driven by two factors

Demand for crude oil processing continued to grow rapidly. In 2020, China processed 670 million tons of crude oil, an increase of 22 million tons year on year, contributing more than 50% of the annual net increase of crude oil imports at ports. The driving force for the growth of crude oil processing demand is shifting the traditional diesel coal to the demand growth of naphtha, petroleum asphalt other petroleum products.

The output of gasoline - fuel kerosene decreased significantly. In the context of the COVID-19 epidemic, the demand for refined oil consumption has weakened significantly due to the significant decline in the demand for air passenger transport, the demand for automobile travel the demand for road freight. In 2020, the total output of gasoline, diesel kerosene was 330 million tons, down 29 million tons 8.1% year on year. Among them, the output of gasoline, coal diesel decreased by 6.6%, 23.2% 4.6% respectively year on year.

Demand for other petroleum products is growing rapidly. Influenced by the rapid growth of the chemical industry, the accelerated pace of infrastructure construction the rapid recovery of the shipping industry, the domestic demand for petroleum products such as naphtha, liquefied petroleum gas, petroleum asphalt fuel oil has increased rapidly. In 2020, the output of the above-mentioned petroleum products will be 180 million tons, with a net increase of 28 million tons a year-on-year growth of 18.2%, among which naphtha, liquefied petroleum gas, petroleum asphalt fuel oil will increase by 6.4%, 7.6%, 18.9% 37.9% respectively.

Demand for crude oil reserves increased rapidly. In 2020, it is estimated that the net increase of China's crude oil reserve demand will be 0.18 million tons, contributing more than 40% of the net increase of China's crude oil import at ports.

In order to ensure energy security the safe development of the petrochemical industry, China has continuously improved the capacity construction of crude oil storage transportation facilities. In recent years, China has planned built national petroleum reserve bases in Dalian, Tianjin, Huangdao, Zhoushan, Zhenhai other cities. In addition, due to the combination of low international crude oil price in 2020, the domestic demand for crude oil reserve is increasing continuously. In 2020, China's crude oil import volume will increase by 0.4 million tons, domestic crude oil production will increase by 0.04 million tons, domestic crude oil processing capacity will increase by 0.22 million tons, foreign crude oil export will increase by 0.04 million tons. Based on this, it is estimated that China will increase its crude oil reserve by about 0.18 million tons in 2020.

International transit trade other factors gradually emerged. With the implementation of pilot free trade zones other policies, China's functions of international crude oil procurement, trade bonded transit have been expanded, the trade market has been gradually cultivated developed. In 2020, the crude oil export volume of China's port foreign trade will be 6.79 million tons, with a net increase of 3.6 million tons over that of 2019, which correspondently boosts a certain amount of crude oil import demand of port foreign trade.

Imports are expected to grow by 6 per cent this year

In 2021, the import of crude oil China's port trade will continue to improve, the import scale is forecast to be 530 million tons, with a year-on-year increase of 6%.

Demand for refined oil products will be better than in 2020. In 2021, China's macro economy will continue to improve, the industrial industry will continue to recover, the demand for car travel road freight will gradually recover, it is expected that gasoline, diesel other demand will be better than the scenario of a sharp decline in 2020, slightly increase. Considering the international epidemic situation, it is difficult for the air transport industry, especially air passenger transport, to recover in the short term, the demand for aviation kerosene will remain depressed. It is expected that the demand level in 2021 will be basically the same as that in 2020 will pick up slightly.

Considering the domestic chemical industry will continue to improve, constantly important role in infrastructure investment, shipping market in the short term remained optimistic factors, such as the downstream naphtha bitumen, fuel oil, liquefied petroleum gas, oil other oil products demand growth will continue in 2020, will continue to be important force pull the crude oil demand growth.

China's crude oil reserve demand will still maintain growth. The 14th Five-Year Plan of China clearly proposes to speed up the construction of oil gas storage facilities, ensure the security of energy strategic mineral resources, bring favorable long-term policies for oil storage transportation capacity construction demand growth. In recent years, with the construction of storage transportation facilities such as national strategic reserves commercial reserves, crude oil storage transportation capacity has been continuously improved, which provides an objective basis for the growth of reserve demand.

In addition, the general downward trend of international oil prices will be significantly reversed, will still be at a low level of operation, bringing market benefits to the demand for crude oil reserves. According to mathematical model theory, the international oil price has a significant impact on the change of China's crude oil reserve demand. The decrease of 1 US dollar per ton of international oil price will stimulate the increase of domestic crude oil reserve demand by 30,000 tons.

Foreign trade crude oil exports still exist growth space. With the implementation of innovative policies such as free trade zones free trade ports, the accelerated expansion of value-added functions such as bonded warehousing, international trade, procurement distribution, China's crude oil export volume will remain at a certain scale is expected to increase in 2021, which will drive the growth of China's crude oil import demand in port trade to a certain extent.

Combined with the above analysis quantitative prediction model, it is predicted that China's crude oil processing capacity will be 700 million tons in 2021, an increase of 23 million tons year-on-year, China's crude oil export will maintain the scale of 2020 slightly increase, onshore crude oil import will remain at 50 million tons, crude oil reserves will increase by 0.07 million tons year-on-year, domestic crude oil production will remain at 190 million tons. Under the above forecast scenario, China's port foreign trade crude oil imports of 530 million tons, an increase of 30 million tons year on year, an increase of 6%, will continue to improve.

We will effectively ensure China's energy security control

Although the import situation of crude oil is improving this year, the author suggests that we continue to increase the construction of crude oil reserve capacity the cultivation of trade market, effectively guarantee China's energy security control, constantly enhance China's voice influence in the international crude oil market.

I. Accelerate the construction of crude oil reserve capacity, promote the coordinated development of national strategic reserves commercial reserves, continuously improve the capacity scale of crude oil reserve, so as to meet exceed the 90-day oil reserve safety standard set by the International Energy Agency as soon as possible.

2. Continue to improve the crude oil pipeline transportation capacity behind the ports unblock the crude oil collection distribution channels in the ports.

3. Relying on large port storage transportation facilities bonded policies, continue to cultivate develop functions such as international trade, international transit, bonded warehousing, futures delivery, etc., improve the futures spot trading market price index, expand the functions of financial derivatives, enhance the pricing power of crude oil.

4. Build an independent, controllable, safe reliable national crude oil transportation fleet, effectively improve China's crude oil transportation support capacity the supporting service capacity of the whole chain, including finance insurance.

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Source: International Petroleum Network