CHINA DATA: Oct crude throughput seen easing from record highs on maintenance, weak demand

China's crude throughput is set to retreat in October from the record high in September due to maintenance, weakening domestic demand, coupled with narrowing oil product exports access and feedstock shortage, information collected by S&P Global Commodity Insights showed Oct. 30.

Refining sources and analysts said the headwinds are likely to have an extended impact, limiting the country's throughput in the entire fourth quarter from the record high of 15.54 million b/d (63.62 million mt) in September and the previous high of 15.3 million b/d in August, according to data from the National Bureau of Statistics.

"After the week-long holiday the demand for oil products have softened, while limited oil product exports quota availability also narrows products outlet, weighting on throughputs," said an east-China-based refining source with Sinopec.

Another refinery source at Sinopec revealed that they are likely to cut throughputs in November amid rising stocks, especially gasoline.

Small independent refineries have not only suffered from limited crude import quota availability as their refining margins of processing imported crude feedstocks has already fallen into the negative territory as of Oct. 25 from Yuan 161/mt ($3/b) as of Sept. 27, according to local information provider JLC.

Both state-run and independent sectors cut throughputs in October.

Average utilization rate of the 50 state-owned refineries covered by S&P Global fell to a four-month low of 83% in October, as four of them were under maintenance. These refineries' targeted to process 8.84 million b/d of crude in the month, compared to their combined primary capacity of 10.66 million b/d.

S&P Global covered 26 Sinopec refineries, 22 owned by PetroChina, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical.

On a year-on-year basis, the run rate was still three percentage points higher from 80.2% in October 2022, when pandemic-related restrictions started to loosen a bit in some regions and refinery runs edged up slightly.

Sinopec's maintenance

Sinopec's overall primary utilization fell to 84.5% in October from 90.3% in September as three of its refineries, with a combined 300,000 b/d of refining capacities, have been offline for scheduled maintenance in October that will last until early-December, according to refinery sources.

Those comprised the 100,000 b/d Dongxing Petrochemical, the 100,000 b/d Qingdao Petrochemical and the 264,000 b/d Guangzhou Petrochemical, which shut its 100,000 b/d crude distillation unit.

In addition, a few other refineries also cut throughputs slightly over the month, due mainly to softening domestic demand.

"The demand for oil products have been weak and the stocks of gasoline has been relatively high," said a Sinopec refinery source in southern China.

"The export margins for gasoline is not good, also there is not enough quotas left to export, so refineries will probably have to cut throughputs to avoid the product stocks piling up," added the source.

PetroChina down to 78%

PetroChina's average run rates was around 78% in October, compared with 80.2% in September, and 81.2% in August.

"The headquarter requires refineries to lower crude throughputs," said a refinery source with PetroChina in northeastern China.

About 14 refineries under PetroChina cut their respective run rates in October, while PetroChina Sichuan has been shut for a maintenance since Sept. 14.

Among these PetroChina refineries, Dalian Wepec led the throughput reduction, which reduced run rate by eight percentage points to around 77% in October.

Meanwhile, CNOOC's 440,000 b/d Huizhou Petrochemical lowered its run rates slightly to around 97% in October, from 100% in September, S&P Global data showed.

Sinochem's Quanzhou Chemical kept its run rates at a relatively high level of around 105%, compared with 106% a month earlier.

Private refiners

Except the 400,000 b/d Hengli Petrochemical (Dalian) refinery, the other two lowered run rates slightly in October.

Hengli has been operating at around 105% in October, stable from a month earlier.

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

The new 320,000 b/d Shenghong Petrochemical was operating at around 96% of capacity in October, due to some unplanned outages, from around 100% in September.

The run rates at small-sized independent refineries in eastern Shandong province, on the other hand, were rangebound compared with a month earlier, due mainly to the weak refining margins, according to market sources.

The average run rates in October was around 69.7%, compared with 69.5% in September, data from local energy information provider JLC showed.

"Many refineries are ready to cut throughputs in the near future due to weak refining margins," said an analyst with JLC.

State-owned refineries maintenance schedule

• PetroChina's 200,000 b/d Sichuan Petrochemical plant shut for an overall maintenance from around Sept. 14 until Nov. 9.
• Sinopec's 100,000 b/d Dongxing Petrochemical plant shut for two-month's maintenance from Oct. 8 until Dec. 18.
• Sinopec's 100,000 b/d Qingdao Petrochemical plant shut for two-month's maintenance over Oct. 7- Dec. 5.
• Sinopec's 264,000 b/d Guangzhou Petrochemical plant shut its 100,000 b/d crude distillation unit for maintenance over Oct. 12- Nov. 30.

Average run rates at China's top refineries

Source: S&P Global Commodity Insights