China Q1 crude throughput jumps 18% on year to 14.17 mil b/d

Singapore — China's crude throughput in the first quarter ended March 2021 posted its strongest growth of 17.8% since 2010 to 14.17 million b/d as the country's gross domestic product grew 18.3% on the year due to the low base given the COVID-19 outbreak during the same period of last year, data released by the National Bureau of Statistics April 16 showed.

The country's GDP plunged 6.8% year on year in Q1 2020, which was the deepest year-on-year quarterly reduction since the beginning of the reform era in the late 1970s.

The GDP decline in Q1 2020 and the subsequent strong year on year growth in Q1 2021 can be translated into an average 5% annual GDP growth comparing to the GDP level in Q1 2019, which suggested a stable recovery in China's economy, NBS said on its website.

However, "the foundation for domestic economic recovery is not yet solid, and some service industries and small and micro enterprises are still facing more difficulties in their production and operation," NBS spokeswoman Liu Aihua said on April 16.

China has set an economic growth target of "above 6%" for 2021 after it grew by 2.3% for the whole year last year and 6.5% in Q4, while the 18.3% growth in Q1 was slightly lower than economists' expectation of 18.5%.

CAPACITY EXPANSION

On top of demand recovery buoyed by the GDP growth, analysts attributed China's strongest year-on-year increase more to the expansion in its refining capacity since Q2 last year, including the start up of Sinopec's 200,000 b/d Zhanjiang Petrochemical, Sinochem Quanzhou's 60,000 b/d expansion and the trial run of Zhejiang Petroleum & Chemical's phase 2 project involving its 200,000 b/d CDU.

The high throughput was also due to state-owned companies ramped up runs ahead their maintenance season in Q2.

But the throughput volume in Q1 was 0.7% lower than 14.26 million b/d posted in Q4 2020, reflecting slower demand during Lunar New Year when industrial activities suspended while the government discourage people movement to prevent COVID-19 remerging.

This had generated high oil product inventory and boosted net oil product exports to jump 20.1% on the year to 6.98 million mt in Q1, according to data from General Administration of Customs.

As a result, the crude throughput volume in March edged down by 0.4% to 14.14 million b/d from the averaged 14.19 million b/d in January-February, NBS data showed.

SLOW DOWN IN Q2

The trend was expected to extend in Q2, with China's overall planned maintenance will rise to 1.33 million b/d in April-June from 1.1 million b/d in March, according to S&P Global Platts Analytics.

In addition to independent refineries, a couple of Sinopec-owned refineries postponed their maintenance from last year to May and June 2021.

The last time outages peaked among state-backed companies was in the spring of 2017, and turnarounds at these facilities are typically scheduled every three to four years, Platts Analytics said.

On a metric ton basis, throughput in Q1 jumped 16.5% year on year to 174.04 million mt, with the volume in March climbing 19.7% to 59.79 million mt, or 14.14 million b/d, from the same month of last year, the NBS data showed.

NBS releases data in metric tons, which S&P Global Platts converts to barrels using a 7.33 conversion factor.

CRUDE OUTPUT HIT HIGH

In the upstream sector, China's crude output rose 3.3% year on year to hit a four-year high of 4.04 million b/d in March on the back of state-owned oil giants' continuous efforts at boosting the country's domestic production, the NBS data showed. It was last higher at 4.09 million b/d in June 2016.

This brought the average crude production in Q1 breached the 4 million b/d mark to hit 4.01 million b/d, up 2.5% year on year.

The volume is likely to stay at relatively high levels in 2021 as the oil giants targeted to stabilize crude output while lifting gas production as part of their effort for China's energy security.

PetroChina and Sinopec, which contributed a combined 71% of China's crude production, planned to lift output by 0.2% year on year in 2021, Platts reported.

NBS does not release monthly output and throughput data for January and February.

China's crude output, throughput (mil mt)

Source: National Bureau of Statistics