(Reuters) - China's crude imports will recover in July from a downward blip as refiners crank up production to meet rising demand after a heavy maintenance program led to the first decline in shipments at the world's second-largest oil consumer in six months in June. The nation's demand growth is expected to slow this year from last, as monetary tightening measures pare consumption. But China will continue to provide the majority of the world's increased crude use, at 40 percent in 2011, the International Energy Agency forecasts. "China is expected to post eight percent year-on-year growth in crude oil imports in 2011," said Brynjar Bustnes, head of Asia-Pacific oil and gas equity research at JPMorgan. "It will need to import an average 22 million tonnes each month (5.35 million barrels per day) in the second half of 2011 in order to meet this growth target, up 5% from the 21 million tonnes per month average in the first half." The country shipped in about 4.79 million barrels per day in June, 11.5 percent less than a year ago, data from the Chinese General Administration of Customs showed on Sunday. Oil demand in China would grow 7-8 percent this year, slightly higher than IEA's estimate of 6.6 percent, according to Sonia Song, head of Asia oil and gas research at HSBC. But she added it would be lower than the exceptionally strong growth of nearly 13 percent in the first quarter. "At 7 percent, growth would be more in line with historical trend and it is still pretty healthy," Song said. Apart from a heavy maintenance schedule, poor refining margins and a high comparative base for last year were the main factors that resulted in the steep slide in June, traders and analysts said. At least two major refineries were overhauled in June, Sinopec's 200,000-bpd plant in the eastern port of Qingdao and a crude unit of the same size at PetroChina's Dalian refinery, lowering throughput at top plants to the lowest in more than a year, according to a Reuters monthly poll. IMPORTS Refiners also lacked the incentive to pump more as many plants were suffering losses in most of May and June as Beijing skipped approval of retail fuel price increases expected in May on fears of stoking inflation. To minimize the impact on margins, refiners may have opted to drawdown stocks, traders said. "June cargoes were mainly bought around April, when oil prices were hovering at more than two-year highs," said a state-oil trader. "To avoid hefty import bills, China's two oil majors - PetroChina and Sinopec - chose to draw down their commercial crude inventories, most of which were bought when oil prices were below $90." Last month's figure also showed a decline because imports in June 2010 had hit an all-time high then at 5.42 million bpd, creating a high comparative base. The Chinese trader also cited foggy weather at Chinese ports such as Qingdao and Tianjin that may have caused some delays in customs clearance for crude tankers. Imports in July should return to positive territory, traders said, due to a low base a year earlier when shipments slipped for the first time in 16 months at 4.47 million bpd. TIGHTENING The world's fastest growing major economy raised benchmark interest rates by 25 basis points last week, its third hike in the past six months to tame prices. Inflation rose to a three-year high at 6.4 percent in June. Oil investors are worried that a series of tightening measures in China may slow energy demand, with data showing the country's factory sector grew at its weakest pace in 28 months in June. The slowdown also comes as Brent prices stay above $110 a barrel, hurting demand for products in developed countries and in turn lowering the order books for China's factories. "Demand is showing sensitivity to absolute oil prices," HSBC's Song said. "Tighter monetary policies were also one of the factors that led to a reduction in the growth rate from the first quarter." The slowdown in factory output may help pare China's requirements for imported diesel to fire generators as the country faces a severe power shortage in the summer. "There's no concrete evidence that China is in need of diesel imports, contrary to beliefs that China may import because of a power crunch," a Singapore-based trader said. "Tighter monetary policies implemented to curb inflation have dented demand." Customs data released on Sunday showed crude imports for the first half of the year gained 7 percent over the same period a year ago at 126.2 million tonnes, easing off the double-digit growth seen in the first five months.

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