CHINA DATA: Sep crude throughput likely to hit record high on robust holiday demand

Combined crude throughput at China's refineries is likely to hit a new record high in September, as both state-owned oil giants and private refiners boosted utilization in anticipation of strong holiday demand, information collected by S&P Global Commodity Insights showed.

Analysts expected throughput to remain at high levels in October, leading to surplus availability of oil products for export.

"Domestic demand for petrochemicals has started to recover, which made it possible for refineries to lift throughput, especially before travelling around the long holiday season," a Beijing-based analyst said.

In 2023, the Mid-Autumn Festival falls on Sept. 29 and together with China's National Day holiday, the country will have eight days of holiday from Sept. 29 until Oct. 6.

"The long holiday season will make it possible for families to travel domestically for sight-seeing or for family gatherings. This will lift demand for transportation fuels," the analyst said.

In August, China's crude throughput hit a record high 15.3 million b/d (64.69 million mt) after rising 2.5% from July, data from the National Bureau of Statistics showed Sept. 15. Growth was aided by strong travel demand during summer holidays and industrial activity recovery. It was the first time the country's crude throughput topped 15 million b/d, surpassing the previous high of 14.97 million b/d in March.

State-owned refiners ramped up utilization rates to an average of 86.9% in September, from 86% in August, S&P Global data showed. September run rates, an 11-year high, was just below the November 2012 rate of 87.6%.

In September, 50 state-owned refineries covered by S&P Global, with a combined capacity of 10.66 million b/d, planned to process 9.265 million b/d of crude oil. This comprised 26 Sinopec refineries, 22 owned by PetroChina, as well as CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical.

On a year-on-year basis, the run rate was also 6.9 percentage points higher from 80% in September 2022, when pandemic-related restrictions started to ease in some regions.

Sinopec raises rates

With none of its refineries under maintenance, Sinopec's utilization rate climbed to around 90.3% in September, two percentage points higher than 88% in August.

Sinopec's Tianjin Petrochemical, which had initially planned to shut one 500,000 b/d CDU for maintenance in October, is expected to postpone maintenance to next year, sources said.

But run rates at Sinopec is likely to drop slightly in October, as three of its refineries, with a combined refining capacity of around 464,000 b/d, will start maintenance from early October. These include the 100,000 b/d Dongxing Petrochemical, the 100,000 b/d Qingdao Petrochemical, and the 264,000 b/d Guangzhou Petrochemical which will shut a 100,000 b/d CDU and some secondary units.

This is expected to keep utilization rates at relatively lower levels until early December.

In September, 19 out of the covered 26 refineries under Sinopec, lifted utilization rates by at least one percentage point from August amid relatively good refining margins, according to S&P Global data.

"Refineries generally lift throughput while boosting exports of oil products," another analyst said.

Meanwhile, CNOOC's 440,000 b/d Huizhou Petrochemical raised its run rates by four percentage points to 100%, from 96% in September, S&P Global data showed. Sinochem's Quanzhou Chemical also boosted operating rates to 106% in September, from 103% in August.

PetroChina maintenance

The 110,000 b/d Daqing Refining and Petrochemical has been in the middle of restarting from scheduled maintenance since Sept. 20, and plans to process about 140,000 mt of crude during the rest of the month, translating to a utilization rate of 31% in September.

Daqing Petrochemical, which resumed normal operations in early August after two months of maintenance, lifted run rates to around 88% in September in an effort to benefit from the traveling season.

On the other hand, Sichuan Petrochemical is shut for maintenance from around Sept. 20, and this would last for about two months until November.

In addition, Guangxi Petrochemical cut its utilization rate by about eight percentage points in September due to the replacement of catalysts at some units.

The shutdown at Sichuan helped to pull down average utilization rates at PetroChina to around 80.2%, down by one percentage point from August.

Private refineries

Private refineries continued to operate at relatively high run rates during the month.

The 400,000 b/d Hengli Petrochemical (Dalian) refinery has been operating at around 105% in September, slightly higher from 104% a month earlier.

The 800,000 b/d Zhejiang Petroleum & Chemical, on the other hand, operated at around 106% utilization rate at four of its CDUs, according to a refinery source, rising from 103% a month earlier.

The 320,000 b/d Shenghong Petrochemical was operating at around 100% capacity in September, largely stable from a month earlier.

Small-sized independent refineries also lifted their utilization rates slightly during the month since plant maintenance was generally over.

This was despite the softening in refining margins, which came under pressure amid rising crude oil prices, sources said.

Average run rates in September were around 69.5%, up from 66.5% in August, data from local energy information provider JLC showed.