MOSCOW (MRC) -- A more than doubling of refining margins and a fresh batch of crude quota allocations spurred China's independent refiners to raise crude throughput to a four-month high in October, pulling down feedstock inventories at ports from record highs, reported S&P Global.
Throughput was expected to continue rising until year end if margins remain elevated as refiners would not want to miss the opportunity after two years of constrained profits, analysts and industry sources said.
"(The higher throughput in October was) mostly driven by a tight gasoil market, given these players often have higher yields and a general edge selling into the wholesale market," said Grace Lee, Senior Analyst with S&P Global Analytics.
State-owned oil refiners have also raised their gasoil output in the recent months, she added, which was mostly done to help fill domestic shortages, as instructed by Beijing. There has been a structural reduction in their gasoil-gasoline output ratio, and around half their gasoil sales are sold directly through the wholesale market.
Feedstock consumption at China's independent refineries in eastern Shandong province rose 6.5% month on month to a four-month high of 10.12 million mt in October from 9.5 million mt in September, data from local information provider JLC showed Nov. 12.
It was the first month since July that throughput at Shandong's independent refineries was higher than 10 million mt.
As MRC informed previously, PetroChina, Asia's largest oil and gas producer, aims to have oil, gas and green energies to each account for a third of its portfolio by 2035, as the Chinese oil major shifts toward a lower-carbon future.
We remind that in August, 2021, PetroChina Liaoyang Petrochemical Co Ltd , part of the Chinese petrochemical major - PetroChina,successfully started up its new polypropylene (PP) plant last week. Based in Liaoning City, Liaoyang Province, China, the new PP plant has a production capacity of 300,000 tons/year.
According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
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