China’s state-owned crude oil refineries (Sinopec, PetroChina, CNOOC, and Sinochem) have increased their crude oil refining rates from an average of 76% in May to 80% of capacity in June, as profit margins increase, a survey by energy analysis company S&P Global Platts showed.
Seven refineries, with a combined capacity of 1.49 million b/d, have been operating at above 100% capacity in June, accounting for 17% of the surveyed capacity.
June’s runs of the refineries were also higher than the 79% recorded in the survey a year earlier, the data showed.
In regards to the independent sector, Zhejiang Petroleum & Chemical boosted its operation rates to about 130% of its total capacity of 20 million metric tonnes per year (mt/year) in June, an increase from around 120% in May. The Hengli Petrochemical (Dalian) facility, with its 20 million mt/year capacity, maintained rates at around 115% in June.
The survey also included the 8.5 million mt/year Sinopec-SK Wuhan Petrochemical refinery in Hubei, based in the Chinese province most affected by the Covid-19 pandemic, which planned to stretch to 105% of its capacity in June.
The news comes after profit margins in China’s crude oil refining sector fell by 42% in 2019, in comparison to 2018, the steepest fall in five years, triggered by overcapacity of refining plants.
In March 2020, some small- and medium-sized refineries faced financial pressure from lack of sales and rise in inventory as a result of responses to the Covid-19 outbreak, China’s Petroleum and Chemical Industry Federation confirmed.