Chinese crude oil throughput hit a new record in June as two new large refineries started up, driving processing rates higher, according to official data from China released on Monday.
Last month, Chinese refineries increased crude throughput by 7.7 percent year on year, to around 13.07 million bpd, Reuters calculations in barrels from data provided in tons by China’s National Bureau of Statistics (NBS) showed.
The start-up of two major new private refineries, each with 400,000-bpd processing capacity, helped Chinese refinery throughput jump to a record high, beating the previous record from April, when independent refiners helped processing volumes to rise to 12.68 million bpd.
Going forward, however, Chinese crude throughput is not expected to break the new record from June at least in the next few months, as there would be extended shutdowns amid high diesel and gasoline inventories and weak domestic fuel demand, Wang Zhao, an analyst with local consultancy Sublime Information Co, told Reuters.
Thanks to demand from the start-up of the two major refineries, Chinese crude oil imports in June also increased, by 1.7 percent from May, and by 15.2 percent from June last year.
China’s crude oil imports in June averaged 9.63 million bpd, up from the average of 9.47 million bpd in imports in May, and a 15.2-percent increase from 8.36 million bpd in June last year, according to Reuters calculations in barrels from data in tons provided by the Chinese General Administration of Customs.
Despite weaker refining margins and a glut of refined oil products, demand for crude in China increased last month thanks to Hengli Petrochemical, which had a new refinery start up earlier this year and ramped up to full 400,000-bpd capacity at the end of May. Another 400,000-bpd refinery, of Zhejiang Petrochemical, began trial runs, further pushing demand for crude.
Some Chinese refiners, however, are curtailing refinery runs in the third quarter as massive refinery start-ups and slowing domestic fuel demand have created a fuel glut in the country, hurting refining margins.
By Tsvetana Paraskova for Oilprice.com
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