China's June crude imports at independent refineries dip amid congestion

Singapore — Chinese independent refineries' June crude imports edged down 0.5% to 4.4 million b/d, or 18 million mt, in June from the record high of 4.42 million b/d in May as Zhejiang Petroleum & Chemical could only manage to take in half of its feedstock tanker arrivals due to port congestion.

ZPC received about 2.85 million mt of crude arrivals in June, according to market information collected by S&P Global Platts on July 3.

However, the 20 million mt/year refinery only managed to take in 1.35 million mt of crude in the month due to congestion problems at Zhoushan port in eastern China's Zhejiang province, according to refinery and port sources. Its imports were at 2.17 million mt in May.

A number of Sinopec refineries in the region and crude barrels delivered to storage facilities in Zhoushan designed by Shanghai International Energy Exchange also use that port.

Many Chinese companies bought crude when prices were low, causing port congestion issues in the country for more than a month.

The volume of crude on tankers idled in Chinese waters for 15 or more days has been consistently setting fresh highs, hitting 42.98 million barrels in the week beginning June 29, data from trade flow and inventory tracker Kpler showed.

Meanwhile, the other leading independent refiner Hengli Petrochemical (Dalian) received 2.28 million mt in June, slumping from 3.35 million mt in May, as the refinery cut its buying with the expectation of crude prices rising, a company source said.

Imports to small-scale refiners up

However, the reduction was capped as the volume of crude oil discharged for the rest of the small-scale independent refineries, including those under the non-major ChemChina, surged 9.1% to 14.39 million mt from the previous record high of 12.95 million mt in May, Platts data showed.

This was because the ports in Shandong, where most of the independent refineries are located, have maximized their capacity to discharge crude cargoes to ease congestion problems.

Chambroad Petrochemical lead the growth in the volume among its Shandong peers to receive 885,000 mt in eight crude cargoes last month from 100,000 mt in May.

But there were still about 67 crude cargoes waiting for discharge at Shandong's crude ports -- Qingdao, Dongjiakou, Rizhao, Yantai, Longkou, Laizhou and Dongying -- as of July 3, according to Kpler.

It also suggests that crude import volume in July is likely to remain heavy.

Platts in June collected information on crude arrivals for 38 independent and non-major refineries. These refineries import crude through ports in Shandong province, as well as Tianjin, Zhoushan and Dalian.

The barrels include those imported directly by the refiners and bought by trading companies on behalf of the independent refiners, and those that were discharged into the tanks.

These refiners were awarded a total of 129.01 million mt of import quotas in the first two batches, accounting for 84.5% of the county's total allocations for qualified refineries.

Crude imports for independent refineries ('000 mt)

*Trading companies' imports for independent refineries

^ Includes other imports for independent refineries

Source: S&P Global Platts data, company sources