Singapore — Crude oil stocks at major ports in eastern China's Shandong province hadrisen to a 13-month high because of heavy maintenance at independentrefineries and high crude imports in the previous months, port sources toldS&P Global Platts Thursday.
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Discharge operations at the ports however, were not affected, they added.
Total crude inventory at the major ports of Qingdao, Longkou, Laizhou andRizhao in Shandong rose 10% from mid-April to around 2 million mt as of May11, the highest since April 2016, according to JLC data. JLC is aBeijing-based energy information provider formerly known as JYD.
And at Qingdao port, stocks have been hovering at relatively high levelsof around 750,000-800,000 mt in recent weeks -- slightly above the averagelevel of 700,000 mt over January-April.
A source at Qingdao port attributed the build in stocks to severalindependent refineries deferring moving crude from the port to theirfacilities in recent weeks, as they are facing ullage issues at their owncrude storage tanks during turnarounds.
A total 12.8 million mt/year (256,000 b/d) of independent refiningcapacity had been shut for maintenance in May, up 41% from 9.1 million mt/yearlast month, according to Platts calculations.
Wantong Petrochemical's 4.3 million mt/year refinery was shut on April 28for a month-long maintenance until end-May, while the 3.5 million mt/yearLijin refinery was shut on May 3 for a turnaround lasting one month. The5 million mt/year Lianhe Petrochemical will restart in end-May from an ongoingmaintenance that started in end-April.
With those plants undergoing full turnarounds, crude consumption isestimated to have been cut by about 1 million mt this month, according tosources.
Adding to a heavy turnaround program, high crude imports over the pastmonths have also contributed to the build in crude stocks at the ports,according to sources.
Crude imports by Shandong independent refineries came at 8.3 million mtin April, down 17% from a record high of 10 million mt in March, a separatePlatts monthly survey showed.
Despite the month-on-month drop, April crude imports were still the second highest level seen since Platts started tracking independent refinery imports in January 2016.
And imports are likely to fall further in May, as fewer crude cargoes have called at the berths this month, given that a few independent refineriesare running low on import quotas.
CRUDE DISCHARGE OPERATIONS NOT AFFECTED
Meanwhile, crude discharge operations at the ports have not been affectedby the high port stocks, according to sources at Qingdao and Laizhou ports.
Currently, Qingdao port is not facing any congestion and it takes about aweek for a cargo to be discharged, which is the normal timing, said theQingdao source.
Sources at Laizhou port also confirmed that there is no congestion,simply because fewer cargoes have arrived in the first half of the month.
A total 300,000 mt of crude have been discharged in the first half of May, falling nearly 29% from around 420,000 mt in the first half of April,according to the source.
No vessels were waiting outside Laizhou port as of Thursday. In contrast,three to four 100,000-mt vessels have waited outside port limits each day atits peak.
At Qingdao port, around six vessels were waiting to discharge onThursday. This compares to a peak of around 15 vessels last year due tologistic issues.
--Staff, firstname.lastname@example.org, with Oceana Zhou, email@example.com--Edited by Irene Tang, firstname.lastname@example.org