A number of Chinese refiners are cutting their run rates, and some plan for turnarounds to offset inventory pressure as the coronavirus outbreak continues to weaken product demand. Hence, crude imports for China’s independent refineries are expected to pull back in February after reaching a new record high of 14.5 million tons in the prior month.
Independent refineries in Shandong province, known as teapots, have slashed their combined run rates to around 45% this week, compared to 48% in early February, and 64% in January, an industry source said. Four refineries, namely Yuhuang Petrochemical, Binyang Petrochemical, Shanneng Petrochemical, and Shenchi Petrochemical, have shut entire refineries for maintenance. These refineries have a combined processing capacity of 10.1 million tons/year. Meanwhile, other refineries are cutting their rates or shutting down their secondary units.
China’s private refiner Hengli Petrochemical has cut its crude oil processing rates at its 400,000-bpd Dalian plant to 90% from 109% as demand continued to weaken due to the coronavirus outbreak, the company’s spokesperson said on Tuesday. Hengli also shut in a 3.2-million tons/year reformer due to market and technical issues.
State-owned CNOOC plans to take 1.5 million tons of crude at its Huizhou refinery this month. This figure represents 86% of the refinery’s nameplate capacity, down from 90% in January.
The 170,000 bpd Wuhan Petrochemical refinery, jointly owned by Sinopec and SK, slashed its utilization rate to 63% this month, from 99% in January. The refinery plans to process around 400,000 tons of crude in February, down from 690,000 tons planned in January.
Sinopec plans to cut run rates at its Anqing refinery to 55% from a planned 94% because of a lack of workers. The state-owned firm will also shut three units at the refinery. Throughput from the refinery reaches 350,000 tons this month, compared to 600,000 tons initially planned.
Sinopec’s Jinling Petrochemical intends to take its 600,000 tons/year gasoline hydrotreater and 1.5 million tons/year FCC unit offline for three months as gasoline sales slow. It will also reduce crude throughput from the planned 1.35 million tons this month.
PetroChina shut its Guangxi Petrochemical on February 9 for a planned 50-day turnaround. The shutdown should help the producer to ease the inventory pressure due to weak demand amid the outbreak.