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CHINA DATA: State-owned refiners cut Oct run rates to five-month low of 81%

Highlights

Plan to boost November throughput

Maintenance works lower Sinopec's utilization

Feedstock shortage dampens independents' crude runs

  • Author
  • Staff
  • Editor
  • Manish Parashar
  • Commodity
  • Oil Petrochemicals

The average utilization rate at China's four state-owned refiners fell to a five-month low of 80.6% in October from 81.5% in September while independent refiners also maintained run rates at low levels due to feedstock shortage, S&P Global Platts data showed Oct. 28.

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These would likely lead the country's crude throughputs to extend the downward trend in October from the 17-month low of 13.7 million b/d, or 56.07 million mt, in September, according to data from the National Bureau of Statistics.

The four state oil companies -- Sinopec, PetroChina, CNOOC and Sinochem -- plan to process a total 7.67 million b/d of crudes in October, against their nameplate capacity of 9.52 million b/d, Platts data showed.

This compared with a planned throughput of 7.7 million b/d in September.

In November, the state-run refiners plan to lift throughput from the low base in October to boost gasoil and gasoline supplies for meeting domestic demand, refining sources said.

"To secure the supply of oil products in domestic market is the top priority," said a source with a Sinopec-owned major refinery in eastern China.

Sinopec leads the cut

Sinopec led the utilization cut among the state-run refiners in October. Its run rate was down two percentage points from September at 82%, processing 4.3 million b/d in October. This was mainly due to scheduled maintenance works at several refineries while the operating ones maintained throughputs with limited feedstocks.

Its 260,000 b/d Gaoqiao Petrochemical and 264,000 b/d Guangzhou Petrochemical have shut units since Oct. 8 and end-October, respectively, till December.

The reductions in these two plants were unable to be compensated by the boost from the 200,000 b/d Shijiazhuang Petrochemical, which resumed operation Oct. 25, and the increased throughput in the flagship Zhenhai Refining & Petrochemical.

Zhenhai started up its new 80,000 b/d crude distillation unit in end-September to lift its primary capacity to 540,000 b/d -- the largest in China. As a result, its throughput also rose to 463,000 b/d in October from 452,000 b/d in September.

The other Sinopec refineries more or less kept their run rates stable from September.

"We don't have enough crude stock to hike run rates while crude price has been too high," a central China-based Sinopec refiner said.

State-owned oil companies had slashed their crude imports in September, leading to the country's crude inflow to fall 5% on the month to 10.03 million b/d, Platts earlier reported.

In November, Zhenhai and some of its Sinopec peers are set to further lift throughput to ensure domestic gasoil supply, a company source said.

But the 280,000 b/d Fujian Refining & Chemical will shut an 80,000 b/d CDU for maintenance from early-November till January 2022, which would weigh on the combined throughput.

PetroChina lifts runs

PetroChina, however, raised its run rate by one percentage point through the month to about 76% as its refineries raised throughputs to meet domestic oil products demand in second-half October.

Its refineries along the coast have largely maintained stable run rates, while those in the interior have lifted throughputs slightly.

These include the Lanzhou Petrochemical, Urumqi Petrochemical and Sichuan Petrochemical that have raised run rates by about two to seven percentage points. They were also required by PetroChina's sales arms to supply more gasoil during the month.

In addition, Sinochem's crude throughput also recovered since its catalysts replacement was completed. This came despite the power rationing in the Fujian province, as Sinochem had intended to raise outputs to meet strong domestic demand ahead of a scheduled maintenance early-November.

Platts data covered 42 state-owned refineries in October, same as in September. These 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 5.29 million b/d, accounting for 87% of the refining giant's total capacity of 6.1 million b/d. Meanwhile, data collected by Platts for PetroChina's refineries represent a combined capacity of 3.49 million b/d, accounting for 85% of the company's total capacity of 4.1 million b/d.

Independent refiners' runs stay low

In the independent sector, the 400,000 b/d Hengli Petrochemical (Dalian) in northeastern China lowered its run rates further to about 90% in October from 91% in September and above 100% prior to August, due to limited feedstocks.

Meanwhile, the average run rate at Zhejiang Petroleum & Chemical's Phase 1 project of 20 million mt/year has been around 70% in early-October, more or less stable compared with September. The refinery shut one CDU in the Phase 1 project for a few days in H2 October due to a severe feedstock shortage. It only managed to start up the second and third CDUs in the Phase 2 project after the allocation of the new 12 million mt quota to its Phase 2 project of 20 million mt/year around Oct. 25. The new allocation will also enable the refinery to start up all its four CDUs toward the end of the month, which would boost its total crude throughputs for 2021.

In addition, the run rates at the small-sized refineries in eastern Shandong province have been hovering low at 66.7% as of Oct. 27, after Kenli Petrochemical started up. This compared with an average run rate of 67.1% in September and 66.8% in August, according to local energy information provider JLC.

State-owned refineries' maintenance schedules

* Sinopec's Shijiazhuang Petrochemical has been restarting from around Oct. 25 from a scheduled maintenance since Aug. 28. It plans to be back to normal operation around Oct. 31.

* Sinopec's Guangzhou Petrochemical has shut an 8 million mt/year CDU for maintenance from late-October to last till early-December, which was about one week behind the original plan.

* Sinopec's Gaoqiao Petrochemical has shut the entire refinery for maintenance from Oct. 8, to last till early-December.

* Sinopec's Fujian Refining and Petrochemical will shut a 4 million mt/year CDU for maintenance during mid-October to mid-November.

* Sinochem's Quanzhou Petrochemical will shut the 12 million mt/year CDU and related units for maintenance from early-November until late-December for about 40-50 days.

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

Average run rates at China's top refiners:

21-Oct
20-Oct
21-Sep
Jan-Oct 2021
Jan-Oct 2020
PetroChina
76%
72%
75%
74%
71%
Sinopec
82%
82%
84%
84%
81%
CNOOC
96%
96%
97%
90%
91%
Sinochem
97%
100%
90%
98%
95%
Subtotal
81%
79%
82%
81%
78%
Hengli
90%
105%
91%
102%
N/A
ZPC
70%
110%
70%
76%
N/A
Shandong independents
67%
76%
65%
73%
70%

Source: S&P Global Platts