CHINA DATA:Oct throughput falls as state-owned refiners cut runs to 79%

Crude throughputs at China’s refineries extended the falling trend in October, with both state-owned oil companies and independent refineries cutting run rates amid weakening refining margins.

 

Combined run rates at the four state-owned oil companies — Sinopec, PetroChina, CNOOC and Sinochem — averaged 78.9% in October, down from 81.5% in September, data collected by S&P Global Platts showed on Oct. 28.

 

It was the fourth monthly consecutive drop since July, when it was 83.1%, a six-month high, Platts data showed.

 

Sinopec, the world’s biggest refiner by capacity, led the cut in October with five percentage point reduction to 82% from September, compared with 88% in October 2019.

 

The company had planned to lift its throughput by 4.3% year on year and process 130 million mt of crude oil in the second half of this year. Q4 is usually a busy season for refineries to hit annual targets.

 

“But it is impossible for us to meet the target this year any way. All we think about is to lower refining loss in the rest of the year,” a Sinopec refiner told Platts.

 

“Domestic demand is not strong while oil product prices in overseas are bad, the only way for us is to limit our throughput in order to lower loss,” the refiner added.

 

As a result, most of the Sinopec refineries are reluctant to make up the throughput reduction due to maintenance in their peers Qilu Petrochemical, Wuhan Petrochemical and Qingdao Petrochemical.

 

Instead, 11 of Sinopec refineries which are in normal operation cut their runs by 1-7 percentage points in October from September. These included the newly launched 10 million mt/year Zhongke Petrochemical, cutting its run to 77% from 80% in September.

 

But Jinling Petrochemical raised crude throughputs by 8 percentage points in October before the refiner shuts its 10 million mt/year crude distillation unit and related secondary units for maintenance from mid-November.

 

PETROCHINA’S RUN STEADY

 

PetroChina’s Dalian Wepec refinery, Guangxi Petrochemical, and Yunnan Petrochemical have been required by the headquarters to further cut their run rates by 5-16 percentage points from September levels, while crude runs in other seven PetroChina refineries were relatively marginal, Platts’ data showed.

 

However, the reduction was compensated in October as Jinxi Petrochemical has ramped up run rates to 67% as it has resumed operation from maintenance in end-September. Its peer Sichuan Petrochemical also lifted run rate by about eight percentage points on the month. The company’s average utilization rate is at 72% in October, flat to the September level, despite dropping from 81% in the same month of last year.

 

In a summary, 39 state-owned refineries plan to process 6.99 million b/d of crude in October, accounting for 78.9% of their nameplate capacity of 8.86 million b/d, according to information collected by Platts.

 

Those refineries cover 20 Sinopec refineries, 17 PetroChina refineries, CNOOC’s Huizhou Petrochemical and Sinochem’s Quanzhou Petrochemical.

 

Around 25 out of the total 39 refineries have cut run rates in October, including a few which were under maintenance, compared with that 19 refineries in September that cut run rates month on month.

 

China’s refinery throughput has been on a downward trend after hitting a historical high of 14.14 million b/d in June, data from National Bureau of Statistics showed.

 

INDEPENDENT REFINERS

 

In addition, China’s independent refineries also cut run rates slightly in October, responding to narrowing refining margins. These independent refineries collectively account for about 31% of China’s total refining capacity.

 

The cuts were led by Hengli Petrochemical (Dalian) Refinery, which lowered run rates from about 108% in September to around 105% at its 20 million mt/year refining complex.

 

Meanwhile, the 45 small sized independent refineries in Shandong province lowered their run rates marginally to 70.6% as of late October, from around 72% in September, according to local information provider JLC. Luqing Petrochemical recently has shut a crude distillation unit due to weak margins.

 

But the 20 million mt/year Zhejiang Petroleum & Chemical has maintained its run rates at around 110% in October, stable from last month. The company aims to start up a new 10 million mt/year CDU under its 20 million mt/year Phase 2 project by November.

 

STATE-OWNED REFINERS’ SCHEDULED MAINTENANCE, RESTARTS IN 2020 AND EARLY 2021

 

** PetroChina’s 7 million mt/year Jinxi Petrochemical restarted at around Sept. 27 from a scheduled maintenance starting from July 9.

 

** PetroChina’s 13 million mt/year Yunnan Petrochemical will shut from early December till end-January for around 50-days scheduled maintenance, postponed from October.

 

** Sinopec’s Qingdao Petrochemical has shut for maintenance from around Oct. 9 for about 50 days.

 

** Sinopec’s Wuhan Petrochemical has shut for maintenance from around mid-October for about two months’ maintenance.

 

** Sinopec’s Qilu Petrochemical has shut a 8 million mt/year CDU for maintenance from early September, to last till end October.

 

** Sinopec’s 21 million mt/year Jinling Petrochemical will shut a 10 million mt/year CDU, as well as some secondary units for about 40-day maintenance since November 17.

 

** CNOOC’s Huizhou Petrochemical will shut for maintenance over February-April 2021.

 

Source:Platts

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