China's domestic refineries processed 14.15 million b/d of crude oil in October, rising 0.9% on the month, to end the downtrend and hit a fresh record high, the National Bureau of Statistics’ data released Nov. 16 showed.
The country’s previous record high throughput was 14.14 million b/d in June, NBS data showed.
The high throughput in October was unexpected, industry officials and market analysts in China told S&P Global Platts.
“We had previously projected October crude throughput to remain in the low levels with notable run cuts from state-owned refineries, due to weaker-than-expected [domestic fuel] demand,” a Beijing-based analyst said.
Leading state-owned refiners have cut their average run rate to 78.9% in October, the fourth consecutive monthly drop, from a six-month high of 83.1% in July and 81.5% in September.
The reduction was due to scheduled maintenance at a few Sinopec and PetroChina refineries, while others were reluctant to boost run rates to make up for the drop amid gloomy domestic demand, Platts reported earlier.
Sources at the operating state-run plants said they preferred to keep the current utilization rates to limit their refining losses.
The small-scale independent refineries in Shandong also kept their average October run rate unchanged at 73% from September, according local information provider JLC.
Meanwhile, “it’s impossible for Rongsheng [Zhejiang Petroleum & Chemical, or ZPC] to start cracking crude oil in its new phase II unit, as it has just completed construction,” a Hong Kong-based analyst said.
ZPC said it started up a new 200,000 b/d crude distillation unit in its phase II project on Nov. 1. Industry sources said feedstock requirements for the just-completed new unit could be limited for now.
Moreover, crude imports in October fell to 15.1% on the month to a six-month low of 10.06 million b/d, suggesting less crude inventory pressure than in the previous months, analysts said.
The country’s crude output in the month also declined 1.4% to 3.88 million b/d from September, despite a 1.4% on the year increase, the NBS data showed.
The unexpected jump
Analysts are now awaiting more detailed data to explain the unexpected throughput increase in October, such as the throughput breakdown by provinces due later in the week ending Nov. 21.
“The unexpected rise makes it difficult to predict the throughput volume for the rest of the year. We had previously estimated a slight month-on-month increase of about 0.2% in November, but now we are more likely to see crude throughput cooling down from the October record high,” the Beijing-based analyst said.
The NBS releases data in metric tons, which Platts converts to barrels using a 7.33 conversion factor.
On a metric tons basis, the October throughput rose 4.3% from September to 59.82 million mt.
Meanwhile, the year-on-year growth was 2.6% in October from 1.3% in September, the NBS data showed.
Jan-Oct throughput, output
The country’s average throughput over January-October rose 2.6% on the year to 13.34 million b/d, following a year-on-year decline of 5.6% in the first quarter due to the coronavirus pandemic.
Meanwhile, China’s crude production rose 1.4% on the year to 3.91 million b/d over the first 10 months of the year, according to NBS data.
The country’s crude production has been stable between 3.88 million b/d and 3.97 million b/d in 2020.
Source:Platts
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