1. Current Situation and Forecasting of China’s Crude Oil Market
China Petroleum and Chemical Industry Federation
Current Situation and Forecasting of China’s Crude Oil Market
Zhu Fang
Director/Research Fellow
Information & Marketing Department
China Petroleum and Chemical Industry Federation
May 25th. 2017, Shanghai

2. Contents I II III Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
Contents
Consumption growth-driven China’s crude oil market I
Gradually improved industrial structure layout II
Forecasting of China’s crude oil market
III

3. I. Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
I. Consumption growth-driven China’s crude oil market
China’s crude oil production & consumption in 2016
Annual crude oil processing volume: 541 million tons, with a year-on-year growth of 2.8%
Crude oil apparent consumption: million tons, with a year-on-year growth of 5.6%
Domestic crude oil output: million tons, with a year-on-year decrease of 6.9%
Crude oil import: 381 million tons, up 13.6%; Crude oil export: 2.9 million tons, up 2.6%; Crude oil net import: million tons.

4. I. Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
I. Consumption growth-driven China’s crude oil market
Unit: 100 million tons
Crude oil quarterly consumption trend in China since 2009

5. I. Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
I. Consumption growth-driven China’s crude oil market
Steady growth of China’s economy provides the most critical support to the consumption growth of crude oil.
Quarter changing trends in China’s GDP since 2012
China’s macro economy has shift gear to a new normal growth since the first quarter of 2012.
X-axis: Q3,2002, Q1,2003, Q3,2003, Q1,2004, Q3,2004,Q1,2005, Q3,2005,Q1.2006, Q3,2006, Q1,2007,Q3,2007,Q1,2008,Q3,2008,Q1,2009,Q3,2009,Q1,2010,
Q3,2010,Q1,2011,Q3,2011,Q1,2012,Q3,2012,Q1,2013,Q3,2013,Q1,2014,Q3,2014,Q1,2015,Q3,2015,Q1,2016,Q3,2016,Q1,2017

6. I. Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
I. Consumption growth-driven China’s crude oil market
Main operation incomes and changing trend of petroleum and chemical Industry since 2003
Main operation income (Unit: RMB 100 million yuan) Year-on-year increase/decrease (Right-axis)
X-axis:

7. I. Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
I. Consumption growth-driven China’s crude oil market
Consumption trend of petroleum product, gasoline and diesel oil since 2009
Petroleum products, gasoline, diesel oil, Index (Petroleum product) Index (gasoline) Index (diesel oil)

8. I II III Contents Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
Contents
Consumption growth-driven China’s crude oil market I
Gradually improved industrial structure layout II
Forecasting of China’s crude oil market
III

9. II. Gradually improved industrial structure layout
China Petroleum and Chemical Industry Federation
II. Gradually improved industrial structure layout
Import sources of crude oil in 2016
Crude oil output by province in 2016
Accumulated growth (%)
Left figure: Heilongjiang Shanxi Tianjin Xinjiang Shandong Guangdong Liaoning Jilin Hebei Henan Qinghai Jiangsu Hubei Guangxi Inner Mongolia Gansu Hainan Sichuan Shanghai Ningxia
Right figure: Russia 14% Saudi Arabia 13% Angola11% Iraq 10% Oman 9% Iran 8% Venezuela 5% Brazil 5%
Russian Federation Saudi Arabia Angola Iraq Oman
Iran Venezuela Brazil Kuwait UAE
Columbia Congo Republic of South Sudan U.K. Vietnam
Australia Kazakhstan Gabon Indonesia Ghana
Malaysia Argentina Equatorial Guinea Ecuador Mongolia
Sudan Libya Mexico Azerbaijan Thailand
Nigeria Norway Egypt USA Qatar
Yemen Cameroon Brunei Chad Congo (Kinshasa)
South Africa Canada Bahamas Albania Netherlands
Philippines Singapore
Crude oil imported from 47 countries
原油进口来自47个国家

10. II. Gradually improved industrial structure layout
China Petroleum and Chemical Industry Federation
II. Gradually improved industrial structure layout
Local independent refinery plants have been granted the use-right of imported crude oil since Outdated industrial capacity has been eliminated by million tons in 2016, resulting in a statistical capacity of crude oil processing up to 804 million tons.。
Domestic crude oil processing volume by provinces in 2016
Accumulated growth (%)
Year-on-year growth%
X-axis: Shandong Liaoning Guangdong Jiangsu Zhejiang Shanghai Xinjiang Fujian Shanxi Hebei Heilongjiang Tianjin Gansu Guangxi Hubei Hainan Jilin Sichuan Beijing Hunan Jiangxi Henan Ningxia Anhui Inner Mongolia Qinghai Chongqing Yunnan Tibet Shanxi Guizhou
Unit:10,000tons

11. 二、布局逐渐完善的产业结构 Major oil producing provinces in 2016
Heilongjiang Shanxi Tianjin Shandong Guangdong Liaoning Jilin Hebei Henan
354 million tons by sea
陆路0.26亿吨
海上3.54亿吨
26 million tons by land

12. I II III Contents Consumption growth-driven China’s crude oil market
China Petroleum and Chemical Industry Federation
Contents
Consumption growth-driven China’s crude oil market I
Gradually improved industrial structure layout II
Forecasting of China’s crude oil market
III

13. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 1: China’s crude oil consumption will continue to maintain steady growth.
Output and consumption of petrochemical down-stream products will sustain growth.
Rate of capacity utilization will be improved to some extent. In 2016, the average rate of capacity utilization for 25 major products under the monitoring of CPCIF is increased by 1.1% compared with the previous year, realizing a moderate but stable and sound growth.　　
Rate of capacity utilization
Number of products
Description
Up by more than 5% 5
Caustic soda, organosilicon methyl monomer, butadiene rubber MDI and polyoxymethylene
Up by more than 10%
Coal-to-liquids, coal gas, coal-to-olefin, coal-to-glycol and TDI
About the same as the previous year 4
Sodium carbonate, acetic acid, PTA and polyether polyol
Slightly down from the previous year
Methyl alcohol, adipic acid, caprolactam and polypropylene
Average capacity utilization rate has been down by 7.2% in the urea industry due to market factors.

14. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 2: Volatility in crude oil prices will smoothly transmitted to the down-stream in China.
CPI and PPI trends since 2010
-CPI -PPI - Difference value
X-axis: Jun. 2010, Aug. 2010, Oct.2010, Dec.2010
Feb.2011, Apr.2011, Jun. 2011, Aug. 2011, Oct.2011, Dec.2011
Feb.2012, Apr.2012, Jun. 2012, Aug. 2012, Oct.2012, Dec.2012
Feb.2013, Apr.2013, Jun. 2013, Aug. 2013, Oct.2013, Dec.2013
Feb.2014, Apr.2014, Jun. 2014, Aug. 2014, Oct.2014, Dec.2014
Feb.2015, Apr.2015, Jun. 2015, Aug. 2015, Oct.2015, Dec.2015
Feb.2016, Apr.2016, Jun. 2016, Aug. 2016, Oct.2016, Dec.2016
Feb.2017

15. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 3: China’s modern coal chemical industry will restrain the growth in crude oil needs.
The development of energy chemical sector will focus on the modernization of coal chemical processing, or clean conversion of coal. 煤炭
煤气化
变换净化
FT合成 空分
硫磺回收
甲烷合成
甲醇合成
氨合成
X……
合成油
甲醇下游MTO、MTP 氮肥
煤制天然气
混合醇、乙醇、IGCC等
能源化工的发展重点是现代煤化工，属于煤炭清洁转化
FT synthesis
Synthetic oil
Down-stream products of methyl alcohol:
MTO, MTP
and nitrogenous fertilizer
Coal gas
mixed alcohols, ethyl alcohol and IGCC
Sulfur recycling
Methanol synthesis
Conversion &
Purification
Coal
Coal gasification
Ammonia synthesis
Methane synthesis
Air separation

16. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 4: Changes in China’s primary energy consumption structure will impact the consumption of crude oil in China.
Shale gas, shale oil
Natural gas
Green and renewable energy sources
Others

17. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 5: Domestic industrial structure will enter into a rebalancing stage due to the market access granted to non-state oil refinery enterprises and loosening control on import and export trade.

18. III. Forecasting of China’s crude oil market
China Petroleum and Chemical Industry Federation
III. Forecasting of China’s crude oil market
Forecast 6: Rapid development of new energy automobile in the down-stream will bring about a new uncertain impact on the needs of petroleum products.

19. China Petroleum and Chemical Industry Federation
Summary
Along with the stable and sustained development of China’s economy, crude oil still will be the important energy source and raw materials source of the country for a long time. Crude oil consumption and pricing will continue to impact the economic development of China’s petroleum and chemical industry in an extended period. Any other energy sources such as coal, lightweight materials or new energy will, grow to exert a long-time progressive influence, but cannot replace crude oil in short time.

20. Thank you for your attention!
China Petroleum and Chemical Industry Federation
Thank you for your attention!
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