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AlwaysFree: Shandong Refiners Cut Rates To 4-Year Low In February

Independent refiners in eastern Shandong province, China, have cut run rates to a 4-year low in February, a survey by a local energy information provider showed. They reduced rates to 40.9% this month from 63.5% in January and 72.2% in December due to slow product sales amid the coronavirus outbreak.

The survey revealed 12 refineries with a total capacity of 39.6 million tons/year had halted operation since late last month, contributing to the fall in run rates this month. The number of idle refineries reached 20, according to the survey, which covered 44 refineries.

These include ChemChina’s Zhenghe Petrochemical, which was shut earlier this week. Zhenghe Petrochemical has a capacity of 5 million tons/year. Sources said ChemChina would also halt operation at Changyi Petrochemical and Huaxing Petrochemical with a combined capacity of 15 million tons/year. Before the shutdown, those plants operated at 70% of capacity, the sources added.

The government of Shandong has restricted road transportation in a bid to curb the virus spread. As a result, refiners struggle to deliver oil products, while inventories continue to increase. The survey found that oil product stocks hit a record of 2.8 million tons in January, surging 191.1% from 966,000 tons in December.

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