MOSCOW (MRC) -- The average utilisation rate at China's four state-owned refiners fell to a five-month low of 80.6% in October from 81.5% in September while independent refiners also maintained run rates at low levels due to feedstock shortage, S&P Global data showed.
These would likely lead the country's crude throughputs to extend the downward trend in October from the 17-month low of 13.7 million b/d, or 56.07 million mt, in September, according to data from the National Bureau of Statistics.
The four state oil companies -- Sinopec, PetroChina, CNOOC and Sinochem - plan to process a total 7.67 million b/d of crudes in October, against their nameplate capacity of 9.52 million b/d, Platts data showed. This compared with a planned throughput of 7.7 million b/d in September.
In November, the state-run refiners plan to lift throughput from the low base in October to boost gasoil and gasoline supplies for meeting domestic demand, refining sources said.
"To secure the supply of oil products in domestic market is the top priority," said a source with a Sinopec-owned major refinery in eastern China.
Sinopec led the utilization cut among the state-run refiners in October. Its run rate was down two percentage points from September at 82%, processing 4.3 million b/d in October. This was mainly due to scheduled maintenance works at several refineries while the operating ones maintained throughputs with limited feedstocks.
Its 260,000 b/d Gaoqiao Petrochemical and 264,000 b/d Guangzhou Petrochemical have shut units since Oct. 8 and end-October, respectively, till December.
The reductions in these two plants were unable to be compensated by the boost from the 200,000 b/d Shijiazhuang Petrochemical, which resumed operation Oct. 25, and the increased throughput in the flagship Zhenhai Refining & Petrochemical.
Zhenhai started up its new 80,000 b/d crude distillation unit in end-September to lift its primary capacity to 540,000 b/d - the largest in China. As a result, its throughput also rose to 463,000 b/d in October from 452,000 b/d in September.
The other Sinopec refineries more or less kept their run rates stable from September.
PetroChina, however, raised its run rate by one percentage point through the month to about 76% as its refineries raised throughputs to meet domestic oil products demand in second-half October.
Its refineries along the coast have largely maintained stable run rates, while those in the interior have lifted throughputs slightly. These include the Lanzhou Petrochemical, Urumqi Petrochemical and Sichuan Petrochemical that have raised run rates by about two to seven percentage points. They were also required by PetroChina's sales arms to supply more gasoil during the month.
In addition, Sinochem's crude throughput also recovered since its catalysts replacement was completed. This came despite the power rationing in the Fujian province, as Sinochem had intended to raise outputs to meet strong domestic demand ahead of a scheduled maintenance early-November.
As MRC wrote before, Sinopec will increase its gasoil supply by 19% in November from October to meet domestic demand. Sinopec will run its refineries at full capacity while adjusting yield to lift gasoil supply in November by 29%, it said without giving the actual number.
We remind that in August, 2021, Sinopec, the world's petrochemical major, launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.