Refiners boost run rates to clear record high crude imports
Abu Dhabi's Murban crude among top five of most cracked feedstock grades
Gasoil stocks rise on weak demand, tepid construction activities
Petrotahlil - China's independent refineries in eastern Shandong province boosted run rates from May to register a new record high monthly average of 79% in June, according to S&P Global Platts calculations July 9 based on raw data from JLC.
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The independent sector's average run rate for the month was more than 1 percentage point higher than 77.9% in May -- the previous record high.
Despite slightly weaker domestic refining margins in June, it was necessary for the independent refining sector to boost their run rates during the month, to clear large inflows of crude oil imported over the May-June period, according to industry officials and refinery sources.
The Shandong independent refineries imported a combined 13.85 million mt of crude in June, a record high volume and 7% more than the 12.95 million mt received in May.
The domestic refining margin in June slid by Yuan 169 ($24)/mt to around Yuan 285/mt, theoretically, for cracking imported crudes, according to JLC's calculations.
A total of around 110,000 mt of bitumen blend was used as refinery feedstock by Chambroad Petrochemical and Yuhuang Petrochemical, marking the highest monthly consumption of the product since March 2018.
The rise in demand for bitumen blend came as little surprise as a slew of road upgrades and paving works kick off in summer. Bitumen blend is the ideal feedstock for asphalt production.
Apart from bitumen blend, the sector processed a combined total of around 11 million mt, or 2.7 million b/d, of crude in June, up 1.5% from May.
In June, a total of 39 different imported crude grades were cracked by the 45 refineries surveyed by Platts, up from 32 grades processed in May.
Among the various crude grades processed by the independent sector in June, the consumption of light sour Abu Dhabi Murban crude registered the biggest growth of 126.1% on the month to 520,000 mt, placing it in the top five list of the most favored feedstock in June.
GASOIL STOCKS CLIMB FURTHER
Reflecting the weaker domestic refining margins, the sector's overall gasoil sales fell 11% month on month in June, leaving the stocks to climb further to 1.38 million mt, up 63.8% on the month.
The gasoil inventory rose for the second consecutive month as the drop in consumption outpaced the reduction in production of the fuel, which fell 5.4% on the month to 5.31 million mt in June.
"The demand from construction projects and mining activities has been slow in summer," a local analyst said.
A severe flood in South China has also impacted gasoil demand, meaning less product will be required from Shandong, sources said.
Some refineries have shut their gasoil units for maintenance, since gasoil demand is usually weak in summer, when less is needed for construction projects and other activities. For example, Wonfull Petrochemical shut a gasoil unit for one month since the beginning of June.
Shandong independent refineries' crude feedstock ('000 mt)
Gasoline, gasoil output, sales and stocks ('000 mt)
Top 10 imported crude grades cracked by Shandong independent refineries ('000 mt)