Chinese data also remains solidly supported by gasoline and light distillates to fuel the ever-growing transportation sector and new expansions in the petrochemical sector. Based on the Secretariat’s calculations and initial data for the month, gasoline demand in China reached 2.7 mb/d in April, which is higher by 0.30 mb/d or 12% y-o-y. This increase was consistent with March sales of passenger cars which enjoyed y-o-y growth of 4%, indicating solid demand for passenger cars, according to China’s Association of Automobile Manufacturers.
For the first fourth months, the sales of passenger cars reached 6.97 million units, a rise of around 8% y-o-y. As for the passenger cars by type, comparing with the same period last year, SUVs continued high-speed growth, with sales up by as much as 49%. The sale of multi-purpose vehicles (MPVs) also increased by around 20% y-o-y. Diesel oil demand also picked up to reach 3.6 mb/d, higher by around 0.22 mb/d y-o-y, gaining support from a number of railway and infrastructure projects.
The overall oil demand momentum seems to have been encouraged by lower oil prices, despite increases in excise taxes and policies and regulations aimed at curbing demand. In the petrochemical sector, LPG consumption rose by around 2% in April, as compared to the same month in 2014, implying healthy demand. On the other hand, consumption of fuel oil dropped for another month as data seem to suggest a decrease in growth of around 0.13 tb/d y-o-y. Slower industrial activities seem to be the largest contributor to this slowdown.
For the remainder of 2015, oil consumption in China looks balanced. The only downside risks are all linked to slower economic activity as well as speeding up of policies encouraging a reduction in the use of transportation fuels. On the other hand,the expansion of the petrochemical sector, especially in PDH plants, and expansion projects in the refinery sector represent the upside potential for China’s oil demand growth.
For 2014, Chinese oil demand grew by 0.40 mb/d, while oil demand in 2015 is projected to increase by 0.31 mb/d.