China Continuing Bitumen Blends Despite Consumption Taxes

Shandong Port, China- Is China’s shortage of crude import forcing the country to resort to importing enormous amounts of bitumen blend? Trading companies and independent refiners have been importing huge numbers of bitumen blend that come with a burly consumption tax. Crude oil in contrast, is free from both import and consumption taxes.

Independent refineries based in the Shandong province are infamous for serving as major buyers of bitumen blend. Independent refiners are not required to use crude import quotas whilst bringing in the cargoes.

At least 801,000 mt of bitumen blend have been shipped into Shandong ports after the tax rate came into effect on June 12th. With an already existing 8% import tax rate, the new consumption tax adds $212.89 to the cost of bitumen blend imports. The increased price tag has inevitably led to an 11.4% fall on bitumen blend imports to China during the month of June. Imports continue to decrease.

Independent refineries and trading companies in China have imported approximately 3.68 million mt of bitumen blend in June before the tax was established. Shandong refiners received nearly 80.3% of those imports. Since then, two cargoes carrying 270,000 mt have already each paid a total tax price of $43.31 million. Imports almost solely come from Malaysia but other countries such as Namibia, Sri Lanka, and Togo also supplied China with appropriate amounts of bitumen blend.

In the beginning of the year, China imported 15.574 million mt of bitumen blend, rising 286.8% from the previous year in which only 4.03 million mt was imported. The independent refineries continued to remain as the largest purchasers of the product. Shandong independent refineries bought approximately 76.2% or 11.87 million mt of the total. Zhejiang companies ranked as the second greatest bitumen blend purchasers taking 9.9% or 1.54 million mt of the imports.