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Japan crude oil imports increased by 13.6% in July
month-on-month but remained around 29% lower than a year ago. The
country's appetite for crude oil seems to be slowly recovering
after reaching a record low in June, when imports dropped below two
million b/d. Data by IHS Markit Commodities at Sea
for the first ten days of August suggest imports continue to slowly
but steadily recover, with activity so far standing at 2.35 million
b/d. A growth of 7.7% is observed in the first third of August
month-on-month, but volumes are still significantly below normal
levels. Japan imported more than 25% more in August 2019 than
current August imports. Accuracy of IHS Markit Commodities at Sea on
Japanese imports versus officially reported data stands close to
98.6% between January 2019 and May 2020.
IHS Markit Commodities at Sea
also allows users to determine how Japan's future crude oil imports
should look like, as it already estimates how much crude oil should
be discharged in the rest of August based on ships currently laden
and heading for the country's ports, providing details on crude oil
grades, origin, port, charterer, shipper and operator. We can also
quickly identify changes developing in the current market, which
will affect Japan's imports over the coming months. As an example,
cargoes loaded in early August and heading for Japanese ports seem
to have increased massively since June and July, having marginally
surpassed 3.5 million b/d during the first ten days of the current
month. If this trend lasts, Japanese imports could recover quickly
in September onwards.
Some of our sources have been suggesting that exporters
proceeded with loading more cargoes to Japan in early August, as
China seems to be facing severe delays in most of its ports, with
congestion reaching new record highs yet again. We expect that
shipments to Japan will drop in the rest of the month but will
still remain significantly higher than what was lifted in June and
July, with clear signals of recovery.
With IHS Markit Commodities at Sea we
can also check seasonality in crude oil lifted for Japan by major
exporter. As depicted in the chart above shipments to Japan dropped
dramatically since OPEC+ reduced its production cuts and exports
since May. The recent recovery seems to have started in flows from
Russia to Japan, with exporters in the Middle East having followed
in early August.
Posted 13 August 2020 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime, Trade & Supply Chain, S&P Global Market Intelligence
