Shandong's crude imports hit an all-time high in December, as some independent refiners tried to use up their quotas for 2018.
About 12 million metric tonnes of imported crude reached Shandong in December, which doubled the province's monthly import in the third quarter, JLC shipping schedules show.
The biggest buyer was China National Chemical Corporation, taking in 1.40 million mt of crude oil.
Dongming Petrochemical ranked second with about 1.3 million mt of imported crude in December, including two 260,000-mt cargoes of Upper Zakum crude, the shipping schedules indicate. The company also bought a 270,000-mt cargo of Castila crude from Colombia, and shipments of Mandji, Napo, Urals and Kissanje crude, respectively.
Hongrun Petrochemical took about 1.16 million mt and Chambroad Petrochemical received about 800,000 mt. Other noteworthy buyers included Lijin Petrochemical, Landbridge Petrochemical, Hulian Petrochemical, and Changyi Petrochemical.
As cargo arrivals peaked in December but independent refiners' consumption was relatively slow, crude stocks at Shandong ports climbed to quite high levels in late December, hitting 5.24 million mt on December 27, JLC data says. Independent refiners in Shandong operated their crude distillation units at 62.88 percent capacity on December 26, far below the 70 percent a year before.
As of the end of November 2018, a total of 40 Chinese independent refiners had gained quotas for the use of 117.44 million mt/yr of crude oil and had been permitted to import 103.49 million mt/yr of crude under the non-state-trade category (the permits for Lianhe Petrochemical and Wantong Petrochemical were not issued yet). A small number of these refiners have not used up their quotas for this year's crude imports yet, because of tighter tax regulations in 2018 that dampened their refining margins, tightening bank lending.
As crude stocks at Shandong ports are high and the country has not issued the first batch of quotas for non-state crude imports in 2019, Shandong's crude imports are expected to drop somewhat in the first quarter of 2019. The Ministry of Commerce released at the end of September 2018 permits for 202 million mt of non-state crude imports in 2019, a surge of 41.8 percent year on year. However, it had not released the first batch of quotas as expected in the middle of December.
By JLC
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