CHINA DATA: Oct crude throughput eases 3% to 15.1 mil b/d from record high in Sep

China's crude throughput eased 2.8% to 15.12 million b/d in October from a record high in September, data from the National Bureau of Statistics showed Nov. 15, as domestic demand weakened.

The trend is likely to extend to rest of the year amid weakening domestic demand, tight availability of crude import quotas for feedstock and limited oil product export quotas for overseas outlets, analysts said.

The reduction in October was within S&P Global's expectations as oil product inventories rose gradually amid record high throughput of 15.54 million b/d in September, while the peak demand season for transportation fuels softened after the Golden Week National Day holiday in early October.

S&P Global data showed that both state-run and independent sectors cut throughput in October. The average utilization rate of the 50 state-owned refineries covered by S&P Global fell to a four-month low of 83% in October from 87% in September. The private 800,000 b/d Zhejiang Petroleum & Chemical and 320,000 b/d Shenghong Petrochemical cut their utilization rates by three and four percentage points, respectively. Utlization of small independent refineries also declined as not only have they suffered from limited crude import quota availability, their refining margins for processing imported crude have fallen from Yuan 161/mt ($3/b) on Sept. 27 into negative territory as of Oct. 25.

The reductions in utilization could be translated into a decline of more than 400,000 b/d month on month considering China's total refining capacity of around 18.6 million b/d, S&P Global estimated.

The NBS releases data in metric tons, which S&P Global converts to barrels using a conversion factor of 7.33. In metric tons, the throughput in October edged up 0.5% to 63.93 million mt from September and gained 9.1% year on year due to the low base in the same month of 2022.

This brought the country's crude throughput to an average of 14.92 million b/d in the first 10 months of this year, rising 11.2% year on year as China fully reopened after coronavirus lockdowns.

Nov, Dec throughput capped

Looking to November and December, tight crude import quota availability and thin refining margins pushed down the utilization rate at Shandong independent refineries by 2.34 percentage points week on week to 63.16% as of Nov. 8, the latest data from local energy information provider JLC showed.

On top of slowing domestic demand, exports are expected to slump in November and December given remaining export quotas of the state-run refineries. This would largely cap throughputs at state-run refineries.

S&P Global forecasts China's crude throughput in 2023 to rise 9.3% year on year to 14.8 million b/d, according to its short-term outlook Oct. 31.

Crude oil output was roughly stable, edging down 0.6% to 4.1 million b/d, but growing 0.5% year on year.

Over January-October, China produced 4.2 million b/d of crude, rising 1.7% year on year, the NBS data showed.

China's crude output, throughput (million mt)

Source: National Bureau of Statistics