CHINA DATA: May crude throughput falls to 5-month low on maintenance, weak margins

China's crude throughput fell in May, making it the second straight month of year-on-year declines and also the second month of decline since August 2022, National Bureau of Statistics data showed June 17, following maintenances and weak refining margins.

The country processed 14.31 million b/d of crude in May, which was a five-month low and represented a 1.8% reduction from the same month the previous year. Throughput fell 3.3% on the year to 14.36 million b/d in April, NBS data showed.

The NBS releases data in metric tons, which S&P Global Commodity Insights converts to barrels using a conversion factor of 7.33. In metric tons, the May throughput gained 2.9% to 60.52 million mt from 58.79 million mt (14.36 million b/d) in April.

This led to China's crude throughput registering a 0.4% year-on-year reduction to average 14.55 million b/d over January-May, the first year-to-date decline since the country reopened following COVID-19 controls.

The soft throughput in May was within Commodity Insights' expectations.

Commodity Insights data showed that the average utilization rate at 51 state-owned refining plants stood at a 12-month low of 78.7% in May, down from 80.9% in April and from the six-month high of 83.4% in March. The reduction came despite the 800,000 b/d Zhejiang Petroleum & Chemical restarting from scheduled maintenance in May, boosting utilization to around 103% from 87.5% in April.

Refining margins down

Meanwhile, the assessed gross refining margin for the state-owned refineries was 65 cents/b in May, slumping by $7.21/b from April. The small independent refineries' gross loss widened by 90 cents/b on the month to $2.61/b in May, according to a monthly report from Commodity Insights dated May 31.

"We expect crude runs to gain more growth momentum in June, driven mainly by reduced maintenance capacity and improving refining margins. However, average runs in the second quarter are likely to decrease by 191,000 b/d compared with the previous quarter," Commodity Insights said in the report.

Some trading sources had a more bearish outlook, and pointed to a possible year-on-year decrease in China's throughput in 2024, as electric vehicles displace gasoline cars and slow manufacturing and construction activity dampens gasoil consumption, while the property market crisis may subdue demand for petrochemical products and gasoil.

Crude production growth narrows

Upstream, China's crude production rose 0.6% year on year to 4.29 million b/d, which was the slowest year-on-year growth since 0.5% seen in October 2023, NBS data showed.

The volume was 0.5% higher than 4.27 million b/d in April.

With the oil giants' efforts, the country's crude output grew 1.1% year on year to 4.3 million b/d in the first five months of 2024.

China's crude output, throughput (million mt)

Source: China's National Bureau of Statistics