CHINA DATA: Independent refineries' Sep feedstock imports fall 4.5% on month to 4.11 mil b/d

China's independent refineries cut their feedstock imports in September as crude import quotas declined and the feedstock imports in the coming months are not likely to rebound, sources told S&P Global Commodity Insights Oct. 17.

Their combined feedstock imports was down 4.5% on the month at 4.12 million b/d in September or 16.84 million mt, S&P Global data showed.

The feedstock imports include crudes, as well as bitumen blend, fuel oil and other heavy oil that does not require crude import quotas.

Looking ahead, it is not likely for independent refineries to ramp up imports again, given the tight quota availability as well as the thin refining margins, sources said.

Expected cargo arrivals bound for independent refineries into Qingdao port in eastern Shandong province are around 4 million mt in October, lower from 5 million mt in September, according to a port source.

Qingdao has been one of the major ports for independent refineries, which accounts for about a third of the feedstock imports for independent refineries over January-September, S&P Global data showed.

China's qualified refineries have received their last batch of crude import quotas for 2023, at 9.54 million mt (69.93 million barrels), resulting in total allocations in 2023 falling 8% year on year to 180.6 million mt (3.63 million b/d).

The allocation would lead to 9 million-10 million mt (757,000 b/d) of shortage in crude imports in the fourth quarter, if the qualified refineries in Shandong sustain their average monthly throughput of imported crudes at about 5.63 million mt, S&P Global data shows.

The refining margins for processing imported crudes were only around Yuan 200-300/mt ($3.53-5.59/b) recently, down from about Yuan 300-400/mt a few weeks earlier, according to a Shandong-based analyst.

Crude imports lower

Among the feedstocks imports in September, the crude feedstock was about 11.7% lower at around or 3.34 million b/d or 13.67 million mt, due mainly to fewer imports by the integrated refining complex.

Private refining complex have received less feedstock imports in September, which were down 18.2% month on month at 1.37 million b/d, or 5.61 million mt.

Bulk of the drop was contributed by Hengli Petrochemical (Dalian) Refinery, which reduced its imports by 60.8% to just 765,000 mt last month.

Zhejiang Petroleum & Chemical also reduced its feedstocks imports slightly by 8% to 3.32 million mt in September.

But the imports by Shenghong Petrochemical were stable on the month at 1.52 million mt last month, on par with that of the previous month.

Small-sized refineries

Feedstock imports by other small-sized independent refineries were largely stable on the month in September at 11.233 million mt, S&P Global data showed.

But small-sized independent refineries also ramped up the imports for those barrels that don't require crude import quotas, amid growing expectations that Beijing may not issue additional crude import quotas toward the end of the year.

The combined imports of bitumen blend, fuel oil and other heavy oil was up 36.3% on the month at 3.17 million mt in September, on higher imports of other heavy oil, as a few more cargoes were brought in by more trading companies for independent refineries.

In September, 574,000 mt of such barrels were imported under "other heavy oil", rising more than six times compared with 95,000 mt in August.

FEEDSTOCK IMPORTS FOR INDEPENDENT REFINERS ('000 MT)

*Including imports of other unknown recipients

Source: S&P Global Commodity Insights