China's refinery throughput increased by 7.5 percent annually in April, signaling a sustained recovery in crude processing, although the volumes were lower than the record-highs seen last November, according to data from the National Bureau of Statistics cited by Reuters.
Last month, refinery throughputs averaged 14.09 million barrels per day (bpd), up from 13.1 million bpd in April of 2020 and slightly up from 14.08 million bpd processed in March 2021, when throughput jumped by 20 percent compared to March 2020.
The average crude processing volumes, however, were lower than the record-high 14.2 million bpd from November 2020 due to planned maintenance at some state-owned refineries as fuel stocks are still high.
In May, refinery throughput is expected to remain steady compared to April as some state refiners are expected to return from maintenance, while some independent refiners are set for overhauls, analysts tell Reuters.
For full 2020, China set a record in annual crude oil processing volumes. After a pandemic-hit slow start to 2020, refiners boosted production from April, thanks to ultra-low crude oil prices and a rebound in the Chinese economy and fuel demand, setting a new record for crude oil processing volumes. Crude oil throughput at China's refineries averaged 674.41 million tons, or 13.51 million bpd, in 2020, a 3.2-percent increase over the previous year to a record-high processing volume, according to data from the National Bureau of Statistics cited by Argus.
As per EIA estimates, China's refineries processed more crude oil than U.S. refineries for most of 2020.
The record Chinese crude processing has led to a glut of refined oil products on the domestic market, and as China ramps up fuel exports, it is depressing refining margins in the rest of Asia.
In a bid to reduce refining overcapacity, China is stepping up pressure on independent refiners to uproot illegal tax practices and check if outdated facilities have been closed as required, Bloomberg reported last month, quoting sources with knowledge of the plans.
By Charles Kennedy for Oilprice.com
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