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  • lizahuang54321 lizahuang54321 Oct 3, 2013 2:47 PM Flag

    China oil demand still growing from CS

    August 2013: Demand recovery continues
    China Total oil demand growth (YoY 3MMA) - LHS CS Li Keqiang Momentum Index (%mm 3MMA) - RHS
    Source: China OGP, CEIC, Credit Suisse Economics Research
    ■ August total apparent oil demand grew 6.1%, tapering off slightly from
    July's 8% growth. Year-to-date China oil demand has been growing at 5.7%
    vs. the CS forecast of 5.9% for the full year. Crude imports fell MoM after a
    record import volume in July, registering 5.0mbd of imports in August, 17%
    growth YoY.
    ■ Gasoline demand deceleration continued in August, recording 2.7%
    growth vs. 7% in July and 13% in June. Year-to-date gasoline demand is still
    growing at a robust 11%. The gasoline demand deceleration in August is in
    spite of continued robust car sales—SUV sales registered 46% growth in
    August bringing year-to-date growth to 43%.
    ■ Diesel demand stayed strong, recording 4% growth in August after 4.7% in
    July, coinciding with the IP growth rebound since June (see Figure 5). Fuel
    oil finally took a pause coming in flat YoY in August, while year-to-date
    growth is still 20%. Naphtha remains weak, down 10% in August, improving
    from a 14% decline in July bringing the year-to-date fall to 10%.
    ■ Fuel upgrade cost pass-through for Chinese refiners—a positive. The
    NDRC announced last week a price rise for NS IV/V fuel standards—a
    Rmb290/t and Rmb370/t increase for gasoline and diesel, respectively. This
    is a positive surprise to the market and should help Chinese refiners pass
    through upgrade costs to consumers. We estimate Sinopec and
    PetroChina's refining margin should rise US$1/bbl and US$0.5/bbl in 2014
    and 2015; accounting for an implementation lag we expect 60% margin
    expansion to be realised in 2014

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