CHINA DATA: State-owned refiners cut Dec run rates to 78% on higher stock, maintenance

The average utilization rate at China's four state-owned refiners fell in December to an eight-month low of 78.2% amid rising oil product stocks and refinery maintenance, while independent refiners largely retained high run rates, S&P Global Platts data showed on Dec. 28.

This was about four percentage points lower from 82.6% in November, when oil companies boosted throughputs to increase oil production.

"We have to cut throughput this month as high production in November has pushed up product inventory while demand is softening in winter," a Sinopec refiner in eastern China said.

China's crude throughput hit a five-month high of 14.57 million b/d in November, with both gasoline and gasoil output hit record highs of 3.83 million b/d and 4.09 million b/d, respectively, data from the National Bureau of Statistics showed.

Rising inventory led the oil giants – Sinopec, PetroChina, CNOOC and Sinochem – to cut throughput to 7.38 in December, from 7.8 million b/d in November, data collected by Platts from 9.44 million b/d of their capacity showed.

Among these refineries, the 300,000 million b/d Quanzhou Petrochemical, which is the solo plant built by Sinochem, shut for scheduled maintenance from Dec. 1 till mid-January.

PetroChina cut

Meanwhile, PetroChina also has cut its average run rates by about three percentage points from November to around 74% in December, Platts data showed.

"Gasoline sale has become bad with stocks piling up," said a PetroChina refinery source in northeastern Heilongjiang province, adding that the refinery will further reduce its throughputs in Q1 slightly to ease gasoline stocks.

Demand of gasoline has been dampened by both the omicron variant of coronavirus and the low temperature in winter, according to the source.

The high gasoline stocks were also seen in PetroChina's refinery in the southern part of China, resulting to both Sichuan Petrochemical and Guangxi Petrochemical cut crude throughputs by about three and six percentage points month on month, respectively.

In addition to weak demand, PetroChina's Yunnan Petrochemical also lowered its run rate slightly in December, because it shut its 4 million mt/year residual hydrogenation unit and the related secondary units for a few days after a blast on Dec. 13.

Sinopec stable

Sinopec, on the other hand, maintained its run rates stable in December at 84% despite its Gaoqiao Petrochemical and Guangzhou Petrochemical resumed operation from partial maintenance.

Additional throughputs from these two plants were offset by 20 of their Sinopec peers, including the 6 percentage points reduction from the flagship Zhenhai Petrochemical following omicron emerged in the town.

But Sinopec's deepest month-on-month drops were contributed by Anqing Petrochemical and Hainan Petrochemical, at 12 and 10 percentage points, respectively, from November.

"Gasoil demand slows down, so that cut throughput," a source with Anqing said.

In December, Platts data covered 42 state-owned refineries, same as in November. Those included 23 Sinopec refineries, 17 PetroChina refineries, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical refinery.

The 23 Sinopec refineries covered by Platts have a combined capacity of 5.30 million b/d, accounting for 87% of the refining giant's total capacity of 6.06 million b/d. Meanwhile, data collected by Platts for PetroChina's refineries represents a combined capacity of 3.49 million b/d, accounting for 85% of the company's total capacity of 4.1 million b/d.

Independents

Among the independent refineries, run rates at the 400,000 b/d Hengli Petrochemical (Dalian) in northeastern China, has been around 100% in December, compared with 90% in November. This comes after the completion of the maintenance at its secondary units, according to refinery sources.

Meanwhile, the average run rate at Zhejiang Petroleum & Chemical has been slightly high in December, at around 82% against its nameplate capacity of 800,000 b/d, compared with an average of 80% in November. The refining complex has started up its fourth CDU of 200,000 b/d in November, after the allocation of the new 12 million mt quota to its Phase 2 project.

In addition, the run rates at the small-sized refineries in eastern Shandong province, has been slightly lower at around 65.4% as of Dec. 22, due mainly to narrowing refining margins and feedstock shortage towards the end of the year, according to local energy information provider JLC. This compared with around 68.6% as of Nov. 26.

State-owned refineries' maintenance schedules

* Sinopec's Gaoqiao Petrochemical has restarted its entire refinery from scheduled maintenance around Dec. 12, which was started from Oct. 8.

* Sinopec's Guangzhou Petrochemical has restarted its 8 million mt/year CDU from Dec. 21 which was shut from late-October.

* Sinopec's Fujian Refining and Petrochemical has shut a 4 million mt/year CDU and some secondary units for maintenance from Nov. 10 until Jan. 11.

* Sinochem's Quanzhou Petrochemical has shut the 12 million mt/year CDU and related units for maintenance from Dec 1, to last till mid-January.

* Sinopec's Hainan Petrochemical is scheduled to shut down for an overall maintenance March-April 2022.

AVERAGE RUN RATES AT CHINA'S TOP REFINERS:

Source: S&P Global Platts, JLC