MOSCOW (MRC) -- China's mega private refineries are expected to operate at full processing rates or higher until April as their margins have improved after the government lifted COVID-19 restrictions, said Hydrocarbonprocessing.
The rise in crude demand at Zhejiang Petrochemical (ZPC) and Hengli Petrochemical, which account for 6.5% of China's refining capacity, will lift crude imports by the world's top importer, with volumes expected to hit record levels this year and support global prices.
ZPC's 800,000 barrels per day (bpd) refinery in Zhoushan city increased its run rate to 100% in February, a company official said, adding that run rates should be "no lower than that now". Hengli's 400,000 bpd refinery in the city of Dalian is operating at 107% to 108%, a company official said.
Higher fuel output from them could offset an expected fall in supplies from planned maintenance by state-owned majors in April and May, traders said. Both ZPC and Hengli are China's top polyester producers and their plants produce large amounts of paraxylene (PX), a raw material for plastic bottles and synthetic fiber.
The margins for producing PX from naphtha have improved, rising by at least USD100 a ton at the end of March, compared with the end of February, a trading analyst said. Chinese petrochemical buyers, including ZPC and Hengli, have cut imports recently as they ramp up output, a Singapore-based petrochemicals broker said.
However, new start-up Shenghong Petrochemical is running its 320,000-bpd CDU below full rates because of production issues at its reformer unit, two sources said.
We remind, CNOOC and Shell Petrochemicals Company Ltd (CSPC), a joint venture established by China National Offshore Oil Corp (CNOOC) and Royal Dutch Shell, signed a framework agreement worth USD5.6-B with China’s Huizhou city government to expand its ethylene project in the city. CSPC is expected to add 1.5 million tons per annum ethylene production capacity on top of its existed 2.2 million tons in Huizhou, according to a statement issued by CNOOC on Sunday night. The new project will have 14 petrochemical production lines to churn out products including ethylene, propylene, butadiene and ethylene glycol.