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CHINA DATA: State-run refineries' crude run rises to four-month high of 82% in June

Highlights

High throughput, low exports lead to weak product sales

Zhejiang Petrochemical Co. delays startup of its fourth CDU

The average utilization rate of China's four state-owned refineries rose by two percentage points on the month to a four-month high of 82.4% in June, compared with 80% in May and 76% in April, as more refineries restarted from scheduled maintenance, S&P Global Platts data showed on June 25.

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As a result, the country's crude throughputs are expected to rise further from the record high in May. China had processed 14.31 million b/d or 60.5 million mt of crude in May, data from the National Bureau of Statistics showed.

Around 38 million mt/year of refining capacity returned to operation between end May and early June across five refineries under Sinopec and PetroChina.

Several refining sources with Sinopec also raised throughputs amid good refining margins amid rising crude prices.

China's government has set the country' gasoline and gasoil retail prices to change in line with international crude prices.

ICE Brent price closed at $75.38/b in London on June 24, rising $4.98/b from $70.40/b on June 1.

"We have boosted run rates to around 101% in order to enjoy the good margins," said a source with a Sinopec's flagship refinery in east China.

However, oil product sales, especially gasoil, slow down in late June due to high throughput and reduction in oil product exports, many refiners with Sinopec said on June 24.

China's refiners were set to cut oil product exports in response to the government's plan to reduce the export quota, Platts reported earlier.

"We will keep oil product exports to a minimum for the rest of the year," a source with a Sinopec Guangzhou, which reduced its total oil product exports to 34,400 mt in June from about 133,000 mt in the previous month.

Two refineries will restart a combined 20 million mt/year of capacity in mid-July after maintenance, and no new capacity will be taken offline over the month, which will likely help boost the crude throughputs further from June, market sources said.

Sinopec raises run rates

The four state-run oil majors - Sinopec, PetroChina, CNOOC and Sinochem -- plan to process a total of 7.6 million b/d of crude in June against their nameplate capacity of 9.24 million b/d.

In comparison, their plan for throughput in May stood at 7.47 million b/d.

Sinopec had raised crude throughputs with several refineries restarting after maintenance, and the average run rates were raised further to a four-month high of 85.5% in June, compared with 82% in April.

Meanwhile, the run rates at PetroChina remained steady at around 74.4% in June, despite its Jilin Petrochemical being shut for maintenance since the beginning of the month. The loss in throughput from Jilin was offset by the restart of Fushun Petrochemical and Dagang Petrochemical.

CNOOC and Sinochem continued to maintain high run rates at their respective refineries on good refining margins, according to sources.

Platts data covered 41 stated-owned refineries in June, compared with 42 in May. These included 22 Sinopec refineries, 17 PetroChina refineries, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical refinery.

The 22 Sinopec refineries covered by Platts have a combined capacity of 5 million b/d, accounting for 83.6% of the refining giant's total capacity of 5.98 million b/d. Meanwhile, data collected by Platts for PetroChina's refineries have a combined capacity of 3.49 million b/d, accounting for 85.3% of the company's total capacity of 4.09 million b/d.

Independent refineries

The 20 million mt/year Hengli Petrochemical (Dalian) in northeastern China has kept it run rates relatively stable at around 106% in June, down from 108% in May. The refinery's utilization rate has hovered at around 107% over the past 12 months.

The run rates at Zhejiang Petroleum & Chemical's three 10 million mt/year crude distillation units stood at 85% in June, stable since April. The refinery planned to start up its second 10 million mt/year CDU at its phase 2 project of 20 million mt/year in June, which might be delayed, as additional quotas for the Phase 2 haven't been allocated yet.

In addition, the weekly run rates at 43 small-sized independent refineries in eastern Shandong province, was around 71.7% as of June 23, down from the previous week's 73.3%. In addition to a few independent refineries were shut for maintenance, Hengyuan Petrochemical and Fuyu Petrochemical will also dismantle their CDUs in order to transfer the capacity to the new Yulong project.

State-owned refineries' maintenance schedules

* Sinopec's Yanshan Petrochemical restarted an 8 million mt/year CDU and related secondary units after scheduled maintenance in mid-May.

* PetroChina's Fushun Petrochemical restarted around May 16 after a 45-day maintenance from around April 1.

* Sinopec's Jiujiang Petrochemical restarted around May 17 after scheduled maintenance from April 1.

* PetroChina's Dagang Petrochemical had restarted from end May after a scheduled maintenance that began on April 10.

* Sinopec's Shanghai Petrochemical restarted from around June 11 after scheduled partial maintenance from April.

* PetroChina's Jilin Petrochemical had shut the whole refinery for maintenance over June 1-July 19.

* Sinopec's Cangzhou Petrochemical has been in maintenance since May 10, to last till June 30.

* Sinopec's Maoming Petrochemical has shut a 10 million mt/year CDU for maintenance from June 10, to last till mid-July.

* Sinopec's Qilu Petrochemical will shut a 4 million mt/year CDU for maintenance from mid-August till late September.

* Sinopec's Shijiazhuang Petrochemical will be shut for overall maintenance over end-August to end-October.

* Sinopec's Guangzhou Petrochemical will shut an 8 million mt/year CDU for maintenance over mid-October to end-November.

* Sinopec's Gaoqiao Petrochemical will shut the entire refinery for maintenance over October 10-early December.

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

Average run rates at China's top refiners

June-21
June-20
May-21
H1 2021
H1 2020
State-owned:
PetroChina
74%
72%
74%
73%
70%
Sinopec
86%
83%
82%
83%
78%
CNOOC
97%
91%
96%
85%
89%
Sinochem
101%
90%
102%
101%
87%
Subtotal
82%
79%
80%
80%
75%
Private:
Hengli
1.06
1.15
1.08
1.06
N/A
ZPC
85%
130%
85%
79%
N/A
Shandong independents
72%
79%
67%
75%
66%

Source: S&P Global Platts