China PMI Sluggish but Crude Imports Rebound

China Update- China’s manufacturing activity remains weak in August – contracting for a fifth consecutive month and adding to fears around a sluggish recovery for the economic powerhouse against a backdrop of fairly limited stimulus measures so far.

• The official purchasing managers' index rose to 49.7 from 49.3 in July, the National Bureau of Statistics said on Thursday.
• The sluggish PMI adds to economic data showing a worsening property slump, falling credit growth and weak consumer spending.
• China crude imports remain strong despite weaker economic indicators with a recovery from July’s pace in August. China’s crude import pace is expected at 11.72mn bpd this month according to Refinitiv, well up from the official customs figure of 10.33mn bpd in July.
• China’s July crude imports were the weakest since January.
• Looking ahead, Chinese demand will largely depend on whether its refineries will continue to export large volumes of diesel and gasoline and what the latest batch of fuel exports quotas look like.
• OilChem has said today that they estimate the third batch volume at 12 million tonnes based on “exclusive sources” which is the upper end of most estimates. Estimated total quotas for 2023: 39.99 million, 2.75 million tonnes higher than last year according to OilChem estimates.
• OilChem said yesterday that Chinese refiners will have used up 98% of their fuel export quotas by the end of August and were anxiously awaiting the latest bunch of quotas.
• A Platts article at the start of the week quoted refinery officials who said the quotas were out but no other outlet has reported on them yet.
• Most consultancies have placed fuel export quotas estimates at between 9-12mn bbls and that they should be out shortly.