Singapore — China's independent refineries raised run rates to a fresh record high of 77.9% in May, with refining margins remaining thick throughout the month, according to S&P Global Platts calculations based on raw data from JLC.
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The last record high of 73.9% was seen in November 2019.
Along with higher run rates, the consumption of feedstock also hit a new record of 11.39 million mt, or 2.69 million b/d, up 6% from April.
In May, a total of 32 grades of imported crudes were cracked by the 45 surveyed refineries, down from 34 in April.
Among all the crudes processed last month, the consumption of Johan Sverdrup rose to top second at 1.17 million mt, up 64.8% on the month.
It was only slightly less than that of ESPO, which is the traditional top crude processed by those independent refineries. Johan Sverdrup overtook Lula, which has similar qualities.
The grade was cracked by nine refineries last month, two refineries more than the previous month.
Gasoil stocks seen rising
Sales of gasoil have come to a standstill, with stocks climbing 39.5% on the month to 840,000 mt.
It was a first month-on-month stock build since gasoil stocks fell from 1.43 million mt in February to 600,000 mt in April.
"The demand from construction projects and mining activities have been slow in summer," said an analyst with JLC.
The stocks are likely to stay firm in the coming months, given the production is expected to remain high due to less maintenance activities in summer compared to January-March on account of COVID-19.
Usually refineries take turns to shut for maintenance in summer when demand for gasoil is low, but this won't be the case this year.
Moreover, it's more likely for those refineries to keep high runs in the coming months, since huge inflows have arrived.
China's independent refineries have imported a total of around 18.7 million mt of crudes in May, up 71.1% on the year to a new record high.
Shandong independent refineries' crude feedstock ('000 mt)
Shandong independent refineries' oil product output, sales ('000 mt)
Top 10 imported crudes cracked by Shandong independent refineries ('000 mt)