MOSCOW (MRC) -- China's total production of six major oil products - LPG, naphtha, gasoline, jet/kerosene, gasoil and fuel oil - rose by an average of 3.9% on the year to 39.78 million mt in November, slower than the crude throughput growth pace of 10.1%, reported S&P Global with reference to latest data from the National Bureau of Statistics Tuesday.
The total volume of the six major oil products accounted for 70.9% of total crude throughput in November, down from 75.2% a year ago.
Analysts expect the oil product yield to remain on a downtrend as new integrated refining and petrochemical complexes start up.
Among these key products, naphtha, gasoline and gasoil were the main products which saw unchanged year-on-year production volumes, or even reductions, even as China lifted throughput to produce petrochemical products.
Output of gasoline and naphtha declined 0.5% and 2.6%, respectively, while gasoil output was steady from a year ago, the data showed.
The reduction and unchanged output figures explains the relative supply-demand balance despite high throughput levels in the domestic market even as demand was slowing down in winter.
"Gasoil sales have been doing very well and we almost have no inventory, while gasoline is also recovering," a Sinopec refiner in central China said Monday.
Crude oil throughput at China's domestic refineries jumped 10.1% on the year to 13.7 million b/d in November, NBS data showed. This is the third straight month in which China's throughput has crossed the 13 million b/d mark, after doing so for the first time in September at 13.80 million b/d, and recording 13.68 million b/d in October.
Meanwhile, fuel oil output surged 39.7% on the year to 2.39 million mt as the 400,000 b/d green field Zhejiang Petroleum & Refining has not yet started fully commissioning its secondary units, followed by jet/kerosene which gained 17% on the year to 3.85 million mt with the increment from the 400,000 b/d new Hengli Petrochemical (Dalian).
As MRC informed earlier, in H1 November 2019, Zhejiang Petrochemical Co Ltd (ZPC) started up its No. 1 cracker in Zhoushan, China, though it is reported that the company is still working to stabilize the operation rate. The cracker has an annual capacity of 1.4 million tons/year of ethylene and 900,000 tons/year of propylene. As reported earlier, the company is also aiming to bring its Phase I downstream PP and PE plants online within 2019. However, the startup schedule is very much depending on the operation of the No. 1 cracker.
The Phase I facility houses a 300,000 tons/year HDPE unit, 450,000 tons/year LLDPE line and a 900,000 tons/year PP plant. Market players are speculating that these units might only come online in Q1-2020 given the large scale of both upstream and downstream production the company is managing.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC