CHINA OIL THROUGHPUT UP

PLATTS - 18 Jan 2021 - China's crude oil throughput inched lower 0.5% to 14.19 million b/d in December from the record high in November, while the country's total crude processed in 2020 edged up 2.7% on the year to 13.51 million b/d, National Bureau of Statistics data showed Jan. 18.

NBS releases data in metric tons, which S&P Global Platts converts to barrels using a 7.33 conversion factor.

On a metric tons basis, the December throughput went up 2.8% from November and 2.1% from a year ago to 60 million mt.

Despite improving oil product sales, both state-owned and independent refineries have cut their average daily throughput in December as they tried to clear product inventory ahead of year-end book closure, refiners and analysts said.

In the state-run sector, average run rate of Sinopec, PetroChina, CNOOC and Sinochem stood at around 78% in December, compared with the 80% average in November, S&P Global Platts data showed.

Meanwhile, the private held Zhejiang Petroleum & Chemical cut its throughput by 11% from November as utilization rate at three of its 10 million mt/year CDUs fell to 70% in December from 83% in the previous month.

Independent refineries in Shandong province also cut their runs to average 73% in December from 76% in November, JLC data showed.

But the 20 million mt/year Hengli Petrochemical (Dalian) lifted its operation rate by two percentage points to 107% in December.

Over January-December, Chinese refineries processed 674.41 million mt of crude, up 3% on the year on a metric tons basis, NBS data showed.

The increase outpaced China's GDP growth in 2020, which was at 2.3%, NBS data showed.

January, February throughput under pressure

Looking forward in January and February, China's throughput is under downward pressure amid weaker-than-expected transportation demand, refiners said.

To prevent COVID-19 spread, several cities and towns in the northern part of China have been under lockdown in January.

Even in the low-risk regions in the south, the government called for citizens to stay indoors during the coming Lunar New Year as the temperature across China edged lower from levels seen in previous winters and could aid the virus from spreading further.

The country on Jan. 17 registered 109 new COVID-19 cases, the sixth straight day to witness more than 100 cases.

Several Chinese told S&P Global Platts that they would prefer canceling their travel plans amid uncertainties relating to the pandemic policies at destinations and back home.

As a result, refining margin narrowed with high crude price but capped oil product prices.

Throughput in the Shandong-based independent refineries was initially under pressure, with refiners cutting their utilization rate by 2-3 percentage points so far this month. State-owned refineries in northern part of China are also expected to cut their throughput further in February.

Lunar New Year starts on Feb. 12 but the travel rush starts usually about 15 days prior to the event, which is a peak season for transportation fuel consumption. Fuel suppliers build up stocks in January for the anticipated pickup in travel demand.

In the upstream, the country's crude output was 3.85 million b/d in December, falling 1.3% on the month but 0.9% higher than the level a year ago.

China's crude production rose steadily in 2020, with 1.3% on the year growth to 3.9 million b/d over January-December, NBS data showed.

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