China’s mixed aromatics imports kept rising in 2015, driven by gasoline blending demand from the domestic market and for exports.
Mixed aromatics imports jumped 95% from November to a record high 1.49 million mt in December. That brought 2015 imports to 6.46 million mt, up 29% year on year — an acceleration from the 25% growth in 2014, according to detailed customs data released Wednesday.
The December spike coincided with China’s new domestic fuel pricing mechanism, which provided a floor for gasoline and gasoil prices. But mixed aromatics prices largely track international crude oil prices, which dropped sharply in December.
Those factors increased the economic incentive to import mixed aromatics for gasoline blending.
The positive blending margins have driven private companies to increase mixed aromatics imports and then sell blended gasoline domestically, which has in turn forced state-owned oil refiners to divert more of their gasoline cargoes overseas.
Most mixed aromatics cargoes imported to China go into the gasoline blending pool, as the petrochemical is a popular octane-boosting blendstock at around 99-102 RON.
The imported blendstock mostly headed to China’s major economic centers last year.
The Yangtze Delta region in east China, including Shanghai, took in 44% of the mixed aromatics imports; Pearl Delta in South China, including Shenzhen and Guangzhou, received 21%; Shandong province, home to most of the country’s independent refineries, took in 19%.
Malaysia replaced the Netherlands as China’s top supplier of mixed aromatics in 2015, shipping 1.34 million mt, a fivefold increase from 2014.
Netherlands came in second at 991,754 mt. Thailand, United Arab Emirates and South Korea rounded out the top five origins.
Even a hike in import tax on mixed aromatics did not quench the country’s appetite.
The Chinese government suspended a temporary tax break on mixed aromatics import since beginning of 2015. The rate rose from 3% to 7%, and imports still made economic sense.
Import values in US dollars have fallen significantly in 2015, averaging $641.61/mt CFR China, according to Customs data.
This compares with $1,011.03/mt in 2014 and $1,055.88/mt in 2013.
With average exchange rate of 6.27 in 2015, 7% import tax and 17% VAT, import cargoes cost averaged Yuan 5,036/mt, several hundred yuan lower than domestically produced cargoes, according to market sources.
