CHINA DATA: July crude throughputs to keep rising amid good demand, end of maintenance

The combined crude throughput for China's refineries maintained the uptrend in July as domestic demand for transportation fuel improves and oil products exports rise, along with fewer maintenance works in the state-owned sector while the private refining complex kept lifting utilization, information collected by S&P Global Commodity Insights showed July 27.

The average utilization rate at China's four state-owned refiners -- Sinopec, PetroChina, CNOOC and Sinochem -- stood at a 23-month high of 83.7% in July, rising for the second straight month from 79.2% in May. The rate was last higher at 84.5% in August 2021.

The run rate was also 10 percentage points higher from 73.5% in July 2022, when pandemic-related restrictions weighed on domestic demand.

Only PetroChina's 210,000 b/d Lanzhou Petrochemical was shut for scheduled maintenance throughout the month, while about 640,000 b/d of capacity from other state-run refineries resumed operation gradually in the second half of July, S&P Global data showed.

This compared with an offline capacity of 850,000 b/d in June from four refineries and 1.52 million b/d from eight state-owned ones in May.

The running refineries also have lifted throughputs as gasoline and jet fuel demand recovers during the summer holidays.

Moreover, oil products exports are estimated to jump 64% month on month to about 3.8 million mt in July amid improving margins, especially gasoil, which also allowed state-run refineries to boost production.

As a result, the 49 state-owned refineries covered by S&P Global are set to process 8.84 million b/d crude in July, against their combined capacity of 10.56 million b/d. This comprised 26 Sinopec refineries, 21 owned by PetroChina, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical. This is expected to lift China's total crude throughput from 14.89 million b/d in June.

CNOOC's 440,000 b/d Huizhou Petrochemical raised its run rates slightly to 95% from 94% in June, while Sinochem's Quanzhou Chemical has been operating at 105% in July, stable from a month earlier.

Sinopec run rate hits 17-month high

Thanks to the completion of refinery maintenance, the run rates at Sinopec have increased to a 17-month high of 88.3%, compared with 82.8% in June, with the last high at 88.35% in February 2022, according to S&P Global data.

This was mainly contributed by the restart of two refineries -- Qingdao Refining and Petrochemical and Luoyang Petrochemical -- that had completed scheduled maintenance in early-July.

Other refineries, including its flagship Zhenhai Petrochemical and Refining and Jinling Petrochemical, raised crude throughputs during the month to benefit from good demand for oil products during the summer holidays.

Zhenhai raised its utilization rate by six percentage points to 92% in July while Jinling lifted throughput to 88% this month, five percentage points higher from that in June.

"China's jet fuel and gasoline demand has recovered to pre COVID-19 levels, while gasoil demand has been relatively weak, so refineries have continued to boost gasoline output and cutting gasoil output," said a Sinopec refinery source.

The average run rates at PetroChina increased to a four-month high of 75.2% in July, compared with 73.5% in June, following the restart from maintenance at a few refineries.

Three refineries, Daqing Petrochemical, Urumqi Petrochemical and Harbin Petrochemical, lifted throughputs after the scheduled maintenance.

Private refineries lift runs

The private independent refining complex continued to operate at high utilization rates in July amid good demand for oil products, sources said.

The 400,000 b/d Hengli Petrochemical (Dalian) refinery raised its utilization rate by about six percentage points to around 104% in July from 100% a month earlier.

The 800,000 b/d Zhejiang Petroleum & Chemical has been operating at a similar level of around 103% in July from 100% a month earlier. The new 320,000 b/d Shenghong Petrochemical refinery has been operating at full capacity, stable from June.

Run rates at small-sized independent refineries in eastern Shandong province were at 65% this July, slightly higher from 64.3% in June, data from local energy information provider JLC showed. The run rate was largely supported by less refinery maintenance works over the month but weakening refining margins -- due mainly to higher crude costs -- capped the throughputs, according to an analyst with JLC.

Theoretical refining margins for cracking imported crudes were slightly lower at Yuan 500/mt, compared with around Yuan 600/mt a month earlier, according to JLC.

State-owned refineries maintenance schedule

Sinopec's 240,000 b/d Qingdao Refining & Petrochemical plant restarted July 10 from a scheduled maintenance May 16-July 9.

Sinopec's 200,000 b/d Luoyang Refining & Petrochemical plant restarted around July 8 from a scheduled maintenance May 15-July 7.

PetroChina's 200,000 b/d Daqing Petrochemical plant started up crude distillation units July 23 after maintenance had started June 10.

PetroChina's 210,000 b/d Lanzhou Petrochemical plant was shut for full maintenance since June 10, to restart from Aug. 9.

PetroChina's 110,000 b/d Daqing Refining and Petrochemical plant to undergo overall maintenance Aug. 3-Sept. 24.

PetroChina's 200,000 b/d Sichuan Petrochemical plant to undergo overall maintenance from mid-September until mid-November.

Average run rates at China's top refiners:

Source: S&P Global Commodity Insights