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Qingdao port sees unprecedented congestion due to oil imports

(Xinhua) Updated: 2016-05-10 14:09

QINGDAO -- Crude oil tankers arriving at Qingdao are waiting for days to be unloaded in unprecedented congestion caused by importers rushing to stockpile oil as prices are on the rise.

In the past few days, tankers have been in queues more than 10 deep off the port in east China, said Su Peng, an official with Qingdao Shihua Crude Oil Terminal. Though Qingdao is one of the world's busiest ports, Su has never seen anything like it.

The oil pipeline linking Huangdao in Qingdao and the neighboring city of Weifang is working at its maximum capacity of 45,000 tons a day, more than twice the amount passing through it the same time last year.

The monthly transport of oil away from Qingdao by road has been raised to one million tons from 600,000 tons the same period last year. And freight trains departing Qingdao are carrying 25 percent more oil than in 2015.

Crude oil processing companies and traders began ordering oil in massive quantities in February, when prices started rising from $26 US per barrel. The price now stands at $45, as the arrival of cheaper orders from earlier this year challenges the port's capacity.

Crude oil imports in ports across Shandong Province, home to Qingdao, rose 78.2 percent in the first quarter compared with the first three months of last year, according to customs statistics.

"Big vessels are jamming big ports, and small vessels are jamming small ports," said Sun Chenglin, logistics manager of Shandong Chambroad Petrochemicals, a major privately owned oil refiner.

The congestion is expected to be alleviated from June, authorities with Qingdao port told Xinhua, after analyzing its major customers involved in crude transport.

Liu Xintian, secretary-general of the country's Commodity Development & Research Center, said the market had been optimistic about the prospects of rising oil prices, and many Chinese companies imported oil at relatively low prices.

However, prices are not likely to exceed 50 dollars per barrel, said Liu. "Oil will lose its cost appeal compared with coal and natural gas if it hits 50 dollars," he said.

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