In Tuesday’s Arrow to the point we argued that China could direct its state-owned crushers to buy US soybeans and on Wednesday Beijing did precisely that by signalling state-run grain purchasers to buy more from America. But it is not just soybeans; according to the sources related to Unipec, trading arm of Sinopec, the Government has “encouraged” them to lift more US crude to help ease tensions between the two countries.
Today Unipec was reported buying 16 million barrels of US crude worth $1.1 billion to load in June. That is the largest volume ever to be lifted in a month and almost four times the amount shipped to China so far this year. If materialised, it would increase China’s share in monthly US crude exports from 1% on average! to about 20%.
China’s imports from the US have already increased substantially in 2018. Despite the sharp drop in April and May - possibly on the back of trade tensions – total US crude shipped to China this year* was 61% higher than the total shipped throughout 2017.
Given China’s pledge, volumes are set to rise further throughout the year. This could coincide with a potential increase in OPEC output as the member countries are considering boosting supplies in an attempt to offset the drop in Iranian and Venezuelan production. Under such circumstances, the crude oil tanker market may find the much-needed support. That said, one should not expect fireworks as the market is still severely over-tonnaged.
Sources:Arrow
Please Contact Us at：
admin@xindemarine.com
