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Production at refinery hits record in China on new taxes

June 18/2021

MOSCOW (MRC) -- China's refinery throughput rose 4.4% in May from the same month a year ago to a record high, as margins improved on the back of easing supplies of blending stocks after Beijing announced new taxes, said Hydrocarbonprocessing.

The country processed 60.50 million tons of crude oil last month, data from the National Bureau of Statistics (NBS) showed on Wednesday, equivalent to 14.25 million barrels per day (bpd). That compares with 14.09 million bpd in April and a touch above a previous record at 14.2 million bpd last November. Throughput for the first five months was 292.74 million tons, up 12% from a year earlier.

New taxes on imports of light cycle oil and mixed aromatics are set to cut into supplies of diesel fuel and gasoline and ease supply overhangs, especially of diesel, lending support to refining margins. According to estimates by Shandong-based consultancy JLC, "theoretical" refining margins at independent plants averaged at around 650 yuan (USD101.78) a tonne at end-May, the highest so far this year.

Crude throughput was also supported by a resumption of production at state-run refineries following regular overhauls. The data also showed China's crude oil output in May was 17.03 million tons, or 4.01 million bpd, up 3.5% from a year earlier. Output over January-May gained 2.2% to 82.65 million tons.

Natural gas output last month increased 5.8% from a year earlier to 16.9 billion cubic metres (bcm), the data showed, with total production in the first five months up 10.3% year-on-year at 87.2 bcm.

As per MRC, oil prices are set to remain on a bullish course this year given the strong recovery in global demand following the COVID-19 pandemic-induced slump. Uude demand is expected to further recover in the second half of this year, given the convergence of the pandemic and the revival of economic activity in the United States and Europe.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, China, Russia.
Category:General News
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