Refinery plants of Chambroad Petrochemicals, in Binzhou, Shandong province, China, on Oct. 24, 2019.STRINGER/Reuters
China’s oil refinery throughput in May rose 15.4 per cent from a year earlier, data showed on Thursday, as refiners brought units back online from planned maintenance and independent refiners processed cheap imports.
Total refinery throughput in the world’s second-largest oil consumer was 62.0 million metric tons last month, data from the National Bureau of Statistics (NBS) showed.
May’s figures represented the second-highest monthly total on record, exceeded only by 63.3 million metric tons in March this year.
May’s production was the equivalent of 14.6 million barrels per day (bpd), up from 12.7 million bpd a year earlier, an increase flattered by a low base in 2022 reflecting the impact of extensive COVID-19 lockdowns. April throughput was 61.1 million metric tons, or 14.87 million bpd.
A return of refinery capacity following maintenance work boosted demand. Sinopec’s Zhenhai and Jinling refineries reopened after being closed in April, while state-owned PetroChina’s 100,000 bpd Changqing refinery also reopened at the end of May.
Operating levels at Chinese state refiners were marginally lower at 76 per cent in May versus around 77 per cent in April, according to data compiled by China-based Longzhong consultancy.
However, independent refiners in the oil hub of Shandong province were able to step up runs as they imported cheap, sanctioned crude from Russia, Iran and Venezuela, enjoying significantly enhanced margins.
Refinery runs have remained high even as downstream demand for refined fuels falters, amid a patchy economic recovery.
Weakness in the property and construction sectors has weighed on diesel demand, whilst the worsening economic backdrop has pulled down travel-related demand for gasoline and kerosene, as well as higher-end refined petrochemicals used in plastics, paints and pharmaceutical products.
However, refiners have been expected to increase throughput to further boost inventory ahead of the summer travel season.
China’s crude oil imports in May jumped to the third highest level on record, totalling 51.44 million metric tons, or 12.11 million bpd, according to data from the General Administration of Customs released last week.
NBS data also showed China’s crude oil production in May was 18.1 million metric tons, about 4.3 million bpd, versus 17.6 million tonnes in 2022.
Natural gas production was up 7.2 per cent to 19.0 billion cubic meters (bcm) from last year’s 17.7 bcm.