The average run rate at China’s state-owned refiners Sinopec, PetroChina, Sinochem and China National Offshore Oil Corp. hit a record high of 85.7% in October, edging up from 85.5% in September, a monthly survey by S&P Global Platts showed Friday. The rate was last higher at 87.6% in November 2012. In October 2018, the rate stood at a year-to-date high of 84.6%.
Refinery run rates in China typically peak over September-November, then retreat from around December and pick up again around January-February, according to Platts observations based on previous surveys. This coincides with strong domestic demand around China’s week-long holidays for National Day in early October and the Lunar New Year in late January or February.
PetroChina lifted its run rate by about one percentage point in October from the month before, while Sinopec cut its run rate by one percentage point and CNOOC and Sinochem kept their rates unchanged, the survey showed. PetroChina’s Daqing Refining and Petrochemical and Dushanzi Petrochemical lifted run rates in October from the month before after restoring normal operations after maintenance, while three refineries – Urumqi Petrochemical and Ningxia Petrochemical in northwest China, and Sichuan Petrochemical in southwest China — cut run rates.
“We don’t have enough crudes to process,” a source with Sichuan Petrochemical said. The refinery, which relies on crudes transmitted via pipeline from the northwest, cut run rates by around 18 percentage points from September. Market sources said this may be due to lower crude supply from Kazakhstan in the month. Sinopec cut its run rates by one percentage point from September to around 88% in October. Market sources said this may be due to recent volatility in freight rates, as high freight rates can make it more expensive to import crude into China for refining.