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CHINA DATA: State-owned refiners raise Nov run rates to 83% on demand boost

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CHINA DATA: State-owned refiners raise Nov run rates to 83% on demand boost

Highlights

Sinopec raises utilization rate despite maintenance

Independents' run rates boosted by good margins

December run rates likely stable

In line with market expectations, the average utilization rate at China's four state-owned refiners rebounded by two percentage points to 82.6% in November, from a five-month low of 80.6% in October, while independent refiners also raised run rates with refining margins remaining good, S&P Global Platts data showed on Nov. 29.

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This will likely continue to support the country's crude throughputs in November, after it rose 0.8% on the month to 13.81 million b/d in October from a 17-month low in September, according to data released by the National Bureau of Statistics Nov. 15.

The four state oil companies -- Sinopec, PetroChina, CNOOC and Sinochem -- plan to process a total 7.8 million b/d of crudes in November, against their nameplate capacity of 9.44 million b/d, Platts data showed.

This compared with a planned throughput of 7.67 million b/d in October, against their nameplate capacity of 9.52 million b/d.

In December, these state-run refiners are likely to keep their throughputs relatively stable, since there is no need to continue to boost gasoil output in some regions, according to refinery sources.

Sinopec leads the pack

Sinopec led the utilization increase among the state refiners in November. It raised run rates by two percentage points from October at 84%, processing 4.376 million b/d in November. The increase came despite scheduled maintenance at three of its refineries.

Its 260,000 b/d Gaoqiao Petrochemical and 264,000 b/d Guangzhou Petrochemical have shut their units since Oct. 8 and end-October, respectively, till December. The 280,000 b/d Fujian Refining & Chemical was also scheduled to shut an 80,000 b/d CDU for maintenance from early-November till January 2022.

However, the impact of a shutdown at these plants was offset by other refineries under Sinopec, as 17 out of the total 23 refineries covered in the data, raised throughputs month on month. Its Anqing Petrochemical and Hainan Petrochemical were two refineries that raised the run rates by 14 and 9 percentage points, respectively, the highest among their peers.

"The supply shortage in some regions have eased after the two months' boosts in October and November," said a refinery source. Zhenhai Petrochemical will likely export a small cargo of gasoil in December, while it suspended exports in November.

PetroChina raises run rates

PetroChina has raised its run rates by one percentage point further to 77.4% in November, the second straight on month increase. The oil major has made commitments to increase gasoil output to meet domestic demand, and required refineries to boost throughputs and gasoil output.

Of the total 17 refineries, nine have raised their run rates by one to eight percentage points, with four cutting by one to three percentage points. Among them, Guangxi Petrochemical has raised its run rates by about eight percentage points to 83%, since the catalyst replacement was finished.

But with the nationwide increase across state refiners, the supply of gasoil has become sufficient locally. So, outflows could increase in December, a Guangxi source said.

Guangxi Petrochemical will likely export a gasoil cargo next month as domestic gasoil supply eases. It exported none in November.

In November, Platts data covered 42 state-owned refineries, same as in October. Those 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 represents 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 refineries outlook

Among the independent refiners, the average run rate at Zhejiang Petroleum & Chemical has generally improved after the allocation of the 12 million mt quota to its Phase 2 project of 400,000 b/d around Oct. 25. The fourth CDU started from around mid-November, with the average run rate for the month lifting to around 80%, from around 70% in October.

In addition, the run rates at the small-sized refineries in eastern Shandong province climbed slightly to around 68.6% as of Nov. 26, while margins remained good throughout the month. This compares with around 66.7% in end October, according to local energy information provider JLC.

Run rates at the 400,000 b/d Hengli Petrochemical (Dalian) in northeastern China have been relatively stable, at around 90%, compared with 90% in October, and 91% in September. Prior to this, the refinery has been operating at above 100% of utilization rate.

The November run rate was capped by the maintenance at its 3.8 million mt/year hydrocracker, which will be completed soon and help lift its run rate back to 100% in December, according to a refinery source.

State-owned refineries' maintenance schedule:

  • Sinopec's Shijiazhuang Petrochemical restarted around Oct. 25 from a scheduled maintenance since Aug. 28, and returned to normal operation around Oct. 31.
  • Sinopec's Guangzhou Petrochemical shut an 8 million mt/year CDU for maintenance from late-October until early-December. The original plan was to shut the unit from mid-October.
  • Sinopec's Gaoqiao Petrochemical has shut its entire refinery for maintenance from Oct. 8 until early-December.
  • Sinopec's Fujian Refining and Petrochemical has shut a 4 million mt/year CDU and some secondary units for maintenance from Nov. 10 until Jan. 11.
  • Sinochem's Quanzhou Petrochemical will shut the 12 million mt/year CDU and related units for maintenance from early-December. The shutdown is planned for about 40-50 days.
  • Sinopec's Hainan Petrochemical is scheduled to shut down for an overall maintenance March-April 2022.

Average run rates at China's top refiners:

21-Nov
20-Nov
21-Oct
Jan-Nov 2021
Jan-Nov 2020
PetroChina
77%
73%
76%
74%
72%
Sinopec
84%
82%
82%
84%
81%
CNOOC
97%
100%
96%
91%
92%
Sinochem
96%
101%
97%
98%
95%
Subtotal
83%
80%
81%
81%
78%
Hengli
90%
105%
90%
101%
N/A
ZPC
80%
83%
70%
77%
N/A
Shandong independents
69%
76%
67%
73%
70%

Source: S&P Global Platts