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Chinese June crude imports at independent refineries dip amid congestion

July 07/2020

MOSCOW (MRC) -- Chinese independent refineries' June crude imports edged down 0.5% to 4.4 million b/d, or 18 million mt, in June from the record high of 4.42 million b/d in May as Zhejiang Petroleum & Chemical could only manage to take in half of its feedstock tanker arrivals due to port congestion, reported S&P Global.

ZPC received about 2.85 million mt of crude arrivals in June, according to market information collected by S&P Global Platts on July 3.

However, the 20 million mt/year refinery only managed to take in 1.35 million mt of crude in the month due to congestion problems at Zhoushan port in eastern China's Zhejiang province, according to refinery and port sources. Its imports were at 2.17 million mt in May.

A number of Sinopec refineries in the region and crude barrels delivered to storage facilities in Zhoushan designed by Shanghai International Energy Exchange also use that port.

Many Chinese companies bought crude when prices were low, causing port congestion issues in the country for more than a month.

The volume of crude on tankers idled in Chinese waters for 15 or more days has been consistently setting fresh highs, hitting 42.98 million barrels in the week beginning June 29, data from trade flow and inventory tracker Kpler showed.

Meanwhile, the other leading independent refiner Hengli Petrochemical (Dalian) received 2.28 million mt in June, slumping from 3.35 million mt in May, as the refinery cut its buying with the expectation of crude prices rising, a company source said.

However, the reduction was capped as the volume of crude oil discharged for the rest of the small-scale independent refineries, including those under the non-major ChemChina, surged 9.1% to 14.39 million mt from the previous record high of 12.95 million mt in May, Platts data showed.

This was because the ports in Shandong, where most of the independent refineries are located, have maximized their capacity to discharge crude cargoes to ease congestion problems.

Chambroad Petrochemical lead the growth in the volume among its Shandong peers to receive 885,000 mt in eight crude cargoes last month from 100,000 mt in May.

But there were still about 67 crude cargoes waiting for discharge at Shandong's crude ports - Qingdao, Dongjiakou, Rizhao, Yantai, Longkou, Laizhou and Dongying - as of July 3, according to Kpler.

It also suggests that crude import volume in July is likely to remain heavy.

Platts in June collected information on crude arrivals for 38 independent and non-major refineries. These refineries import crude through ports in Shandong province, as well as Tianjin, Zhoushan and Dalian.

The barrels include those imported directly by the refiners and bought by trading companies on behalf of the independent refiners, and those that were discharged into the tanks.

These refiners were awarded a total of 129.01 million mt of import quotas in the first two batches, accounting for 84.5% of the county's total allocations for qualified refineries.

As MRC informed previously, in H1 February, 2020, Chinas private chemical giant and refiner Hengli Petrochemical cut to 90% from this week its crude oil processing rate at a northeastern plant, down from 109%, as a spreading coronavirus hits demand. The cuts at the 400,000-barrel-per-day refinery and petrochemical complex in Dalian were equivalent to 17%, or 76,000 bpd. Hengli also shut in a 3.2-million-tonne-per-year reforming unit, one of three it operates, because of a mix of technical and market problems.

We remind that Hengli Petrochemical resumed operations at its propylene unit on March 9, 2020, following a planned outage. The unit remained under turnaround for about one week. Located in Liaoning, China, the propylene unit has a production capacity of 450,000 mt/year.

We also remind that Hengli started up the 450,000 tons/year Phase I polypropylene (PP) plant in May 2019 and launched its Phase II PP plant by end of November 2019.

Propylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
Author:Margaret Volkova
Tags:PP, crude and gaz condensate, PP random copolymer, propylene, petrochemistry, Chambroad Zhongju, ChemChina, Hengli Petrochemical, Zhejiang Petrochemical, Zhejiang Petroleum and Chemical Co (ZPCC), China, Rossiya.
Category:General News
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