By Henning Gloystein, Jane Chung and Osamu Tsukimori

SINGAPORE/SEOUL/TOKYO, July 7 (Reuters) – After half a yr of robust oil value rises, Asian crude demand is slowing and by some measures falling, and plenty of market contributors suspect it isn’t only a cyclical phenomenon, but in addition a product of extra everlasting structural modifications.

With years of annual financial development of 7-10 p.c in China and related latest figures from India, Asia-Pacific has overtaken the Americas to grow to be the world’s greatest oil consuming area, accounting for nearly 40 p.c of world demand.

But an business that has come to depend on Asia’s booming thirst for oil might quickly be scratching round for development.

Thomson Reuters Eikon information exhibits that Asian crude oil tanker imports have fallen, albeit from document ranges, for 4 straight months and by 12 p.c since March to round 82 million tonnes (20 million barrels per day), barely under final yr’s ranges.

Much of the shock decline is defined by circumstances in China, the area’s greatest shopper, accounting for 27 p.c of Asia-Pacific demand and 13 p.c of world demand.

With its long-term development outlook now camped maybe completely under 7 p.c, most analysts count on car gross sales in China will gradual accordingly.

They have already slipped to 2.1 million on the finish of May, down from a peak of virtually 2.8 million in December 2015.

Refiners throughout Asia stated that was beginning to hit their enterprise.

“Asian oil demand growth is slowing down. China, Asia’s largest market, is experiencing sluggish demand,” stated a South Korean refiner.

As home refiners dump surplus gas, China’s exports of diesel and gasoline, the primary refined fuels for industrial and passenger autos, have each soared.

“Asia refiners have already started to pull back … and there are reports of (oil) cargoes struggling to sell,” stated Adam Longson of Morgan Stanley this week in a be aware to shoppers, including that demand within the third quarter might fall additional.

Ship brokers say merchants have began chartering supertankers to retailer provides that customers can’t take in.

One key pillar of latest demand isn’t coming again. Analysts suppose China has practically completed constructing its strategic petroleum reserves (SPR).

Oil analysts at JPMorgan estimated in a be aware to shoppers final week that the SPR was now at 400 million barrels, which they believed was near capability.

“Our model suggests a 15 percent month-on-month decline in China’s crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average,” they stated.

EFFICIENCY SAVINGS

Structural modifications in demand are usually not restricted to China.

For Asia’s most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall.

Japan’s oil consumption, as soon as 6 million barrels per day (bpd) and 10 p.c of world demand, has fallen to not far more than 3.5 million bpd, or below 5 p.c of world consumption. It will fall additional as authorities consolidates its refiners.

“There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement,” stated Kaname Gokon, strategist at brokerage Okato Shoji.

The scenario is analogous in South Korea.

“Korea’s oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall,” stated Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute.

Even in India, the business’s huge hope to compensate for slower demand in China, demand for brand new automobiles is tepid.

While Indian bike gross sales stay robust, the variety of new automobiles bought has fallen under 215,000 per thirty days, down from virtually 260,000 in October and effectively under the month-to-month document of simply over 300,000 greater than 4 years in the past.

While business doesn’t count on Asian oil demand to say no outright, they are saying the expansion seen over the previous decade might by no means be revisited.

The gas financial system requirements of latest automobiles, which stagnated under 30 miles per gallon (mpg) between 1980 and 2010, have improved to round 40 mpg now and are anticipated to rise to mid-50 mpg by the early 2020s, in accordance with business estimates. That’s with out contemplating the rise of hybrid or pure electrical autos.

“Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 percent (between 2014 and 2040),” U.S. oil big ExxonMobil says in its 2016 outlook.

(Additional reporting by Aizhu Chen in BEIJING; Editing by Will Waterman)

(c) Copyright Thomson Reuters 2016.