China energy use turns steady, but not enough to lift economy

China's crude oil imports fell 6.0% on year to 5.66 million barrels per day in May, according to the Customs data. Meanwhile, the nation's crude oil processing in May rose 2.4% from a year ago to 9.23 million bpd, according to the National Bureau of statistics.

China's crude oil imports in the first five months in this year were 2.0% lower than a year ago, however, previous year's import figures included about 400,000 bpd of strategic reserve. If compare imports figures excluding the strategic reserve, Chinese crude oil imports in Jan-May could be about 6% higher on year.

Crude oil processing in China has slowed down this year from the strong growth in the second half of 2012. But recent growth rates are relatively steady than the average rate during mid 2011 and mid 2012. Growth of electricity generation is also recovering compared to the previous year's level.

Slow down of Chinese energy consumption seemed to have bottomed out in the second quarter of 2012. Currently growth of energy use is recovering. On the other hand, Chinese industrial production in May only rose 9.2% on year, it was the lowest growth since August 2012. Processing trades in the month was 4.4% lower from a year earlier, as well.

Although energy consumption shows rebounding, industrial activities are sluggish. Less than 5% growth of energy consumption is unlikely to sustain steady economic growth in China.

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