CHINA DATA: June crude throughput set to recover on month as maintenances end

China's crude throughput is set to rise month on month in June as refineries resume operations from maintenance amid expectations of demand recovery from pandemic-led movement curbs, data from S&P Global Commodity Insights showed June 28.

However, the increase is expected to be capped by high product inventory as demand recovery is slower than expected, while oil products exports remained low with two Sinopec refineries hit by fires earlier in June.

S&P Global data in June showed China's four state-owned refiners lifted their average utilization rate to 75% from a two-year low of 73.4% in May, suggesting a gain in throughput on the back of higher runs at independent refineries.

S&P Global data covered 46 state-owned refineries in June, compared with 48 in May, including 24 Sinopec refineries, 20 PetroChina refineries, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical refinery.

These refineries will process a combined 7.48 million b/d of feedstock in June against their combined capacity of 9.98 million b/d.

Most of those state refiners continued to operate at low run rates amid weak demand in domestic market and high stocks of oil products, especially gasoline, sources said.

Sinopec led the recovery with refinery maintenance over, while CNOOC and Sinochem also raised the throughputs slightly, but PetroChina was unchanged month on month.

The country processed 12.75 million b/d of crude in May, edging up 0.7% from a two-year low in April amid Beijing's effort to stimulate the sagging economy, despite the volume slumping 10.9% year on year, according to data from the National Bureau of Statistics.

Sinopec throughput rises

Sinopec raised its utilization rate by about three percentage points to around 76% in June from a 26-month low of 73.2% in May, S&P Global's data showed.

In June, 580,000 b/d of its capacities at Tahe Petrochemical, Yangtze Petrochemical and Hainan Petrochemical refineries resumed operations from maintenance.

However, the increase have been partly offset by shutdowns in the 360,000 b/d Maoming Petrochemical and 320,000 b/d Shanghai Petrochemical due to fires in their petrochemical plants in June.

Both complexes have been shut, leading Maoming's utilization rate to drop to 68% from 98% in May while Shanghai's slumped to 31% from 65% from the previous month.

Their operating peers did not compensate for the reduction but maintained relatively low throughput to ease oil product inventory pressure. These refineries include its flagship Zhenhai Petrochemical, Jinling Petrochemical, and Tianjin Petrochemical.

"We need to destock gasoline by lower product yield and cap throughput," said a source with Sinopec's refinery in eastern China. "Economy activities remain slow, and our gasoil stock hit tank-top," a southern China-based Sinopec refiner added.

PetroChina stable

PetroChina's average run rate stood at 71.1%, more or less stable from the 71.3% in May.

Out of the 20 PetroChina refineries that S&P Global covered, 15 raised the run rates by one to nine percentage points from May. These included the 110,000 b/d Daqing Petrochemical and Refining, which raised its run rate by nine percentage points from May. The refinery managed to resume exports and sent two MR-sized gasoline cargoes in June.

Meanwhile, the 110,000 b/d Liaohe Petrochemical completed its turnaround on June 15 and lifted utilization to 40% from 28% in May

Four refineries maintained stable utilization, and the 200,000 b/d Dalian Wepec refinery was completely shut for maintenance throughout June.

Refinery sources said PetroChina tried to raise throughput by lifting oil product exports in June as domestic demand improvement was slower than expectation. But the outflows remained below the levels a year ago, they added.

Independent refineries' margins up

The average utilization rate at Shandong's independent refineries has climbed further to around 66% in June from 60.6% in May amid rising refining margins, with use of more discounted Russian feedstocks, according to local information provider JLC.

Moreover, operation rate at the 800,000 b/d Zhejiang Petroleum and Chemical recovered to around 84% in June from 79% in the previous month.

ZPC has been exporting MTBE, a gasoline blending component, as it has run out oil product export quotas.

Run rate at the 400,000 b/d Hengli Petrochemical (Dalian), however, fell to around 82% in June from 85% in May as it is preparing for a partial turnaround in July, sources said.

STATE-OWNED REFINERIES MAINTENANCE SCHEDULE

* Sinopec's Tahe Petrochemical restarted its 100,000 b/d refinery from May 7, following a 45-day maintenance that started March 16

* Sinopec's Shanghai Petrochemical shut a 160,000 b/d CDU as well as a few secondary units for maintenance in mid-May, and then the entire refinery in mid-June, to last till July

* Sinopec's 190,000 b/d refinery Hainan Petrochemical has restarted from overall turnaround since May 24, about two weeks behind the original schedule of May 11

* PetroChina's Dalian Wepec shut some secondary units for maintenance since May 25, including a residue desulfurization unit for about two months

* Sinopec's 290,000 b/d refinery Yangtze Petrochemical restarted at around May 29 from a scheduled maintenance since March 15

* PetroChina's 100,000 b/d Liaohe Petrochemical has restarted from around June 16, from a maintenance since May 10

* PetroChina's 120,000 b/d Karamay Petrochemical to shut for maintenance May 20-July 5

* PetroChina's 74,000 b/d Qingyang Petrochemical to shut for maintenance June 10-Aug. 1

* PetroChina's 50,000 b/d Yumen Petrochemical to shut for maintenance July 1-Aug. 16

* PetroChina's 100,000 b/d Hohhot Petrochemical to shut for maintenance July 15-Sept. 15

* PetroChina's 200,000 b/d Huabei Petrochemical to shut for maintenance in August

AVERAGE RUN RATES AT CHINA'S TOP REFINERS

Source: S&P Global Commodity Insights