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China July refinery output down to lowest in months as independent plants cut their production

August 18/2021

MOSCOW (MRC) -- China's daily crude throughput last month fell to the lowest since May 2020 as independent plants slashed production amid a tighter quotas, high inventories and weakening profits, reported Reuters.

Last month's processing volumes were 59.06 million tonnes, or 13.9 million barrels per day (bpd), 0.9% below the same month of 2020, data from the National Bureau of Statistics (NBS) showed on Monday. That was the first year-on-year decline since March last year when coronavirus hammered Chinese fuel demand, and the July level was down 6% from off June's record at 14.8 million bpd.

Total throughput during the first seven months of 2021 reached 412.41 million tonnes, up 8.9% from a year earlier, largely reflecting the economy's recovery from the initial impact of the coronavirus pandemic.

Volumes fell in July as independent plants scaled back processing in the face of tightening quotas as Beijing stepped up scrutiny of irregular trading of the permits.

Independent plants were facing tighter feedstock supplies and weakening margins. Some took to overhauls, other cut processing," said Zhou Mi, analyst at Chinese commodities consultancy JLC.

These plants, sometimes known as teapots, operated crude processing capacity at 64.4% in July, down almost 14 percentage points from July 2020, according to JLC.

Throughput could take a further hit this month as a resurgence of coronavirus case in more than a dozen provinces is set to curb mobility.

The NBS data also showed China's crude oil output in July at 16.87 million tonnes, up 2.5% from year-earlier level. Over the first seven this year, output rose 2.4% to 116.21 million tonnes. Natural gas output last month gained 9.8% from a year earlier to 15.8 billion cubic metres (bcm), while January to July production expanded 10.7% to 120.2 bcm.

As MRC informed previously, China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
Author:Margaret Volkova
Tags:crude and gaz condensate, propylene, ethylene, gas processing, petrochemistry, China.
Category:General News
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