China 2024 crude oil import quota up 60%; factory activity expands

China has released 179.01 million metric tons of crude oil import quotas for 2024, 60 per cent more than the January batch last year as almost all the refiners received their annual allocations, consultancies and trade sources said on Tuesday.

The latest move marks a shift by Beijing, which has been releasing quotas in batches every few months since it opened up crude imports to independent refiners in late 2015. Uncertainty over quotas could hold refiners back from buying more crude when prices are low or ramp up purchases to meet higher demand.

Forty-one companies, mostly independent refiners were given the fresh quotas, trade sources and consultancy JLC and Longzhong said. The quota issued in January last year was 111.82 million tons.

These independent refiners now make up over a third of total imports into the world’s largest buyer as more large, integrated refiners have joined the fray in recent years.

The January allocation, equivalent to about 3.6 million barrels per day, is still short of the 203.64 million tons or 4.07 million bpd issued for 2023 and traders said there would be at least another batch to be issued later in the year. The 2023 volume included an odd tranche released in October 2022 in advance for 2023 and was 14 per cent higher than 2022.

China’s factory activity expanded at a quicker pace in December due to stronger gains in output and new orders, but business confidence for 2024 remained subdued, a private-sector survey showed on Tuesday.

The Caixin/S&P Global manufacturing PMI rose to 50.8 at the end of 2023 from 50.7 in November, marking the fastest expansion in seven months and surpassing analysts’ forecasts of 50.4. The 50-point mark separates growth from contraction.

The sprawling manufacturing sector came under pressure amid weak demand in 2023, with a property downturn, geopolitical factors and tight-fisted consumers all weighing on the post-pandemic recovery.