China’s refinery runs hit its highest levels this year during September, which led to a rise in oil imports by 3.9% compared to the same month last year.
The Asian giant purchased 47.25 million metric tons of crude oil last month, according to data from the General Administration of Customs. The amount is equivalent to 11.5 million barrels per day of oil.
China is the world’s largest importer of crude oil.
Refinery runs hit high
In September, China’s refinery utilisation rates reached their highest point of the year, a trend observed by Chinese consulting firm Oilchem.
This surge in activity resulted in relatively high daily output levels for both gasoline and diesel, Oilchem was quoted in a Reuters report.
However, despite the increased production, the report indicated that supply continued to outpace demand within the Chinese market.
This situation suggests a potential oversupply of refined petroleum products, which could have implications for domestic prices and inventory levels.
The climbing utilisation rates reflect a robust operational capacity within China’s refining sector, yet the demand-supply imbalance highlights ongoing market dynamics that warrant close monitoring.
Chinese refineries increased their utilisation of atmospheric and vacuum distillation units, reaching 73.45% of capacity.
This represents a 1.28 percentage point increase from August and a 3.22 percentage point increase compared to the previous year, according to Oilchem.
Oilchem reported that state-owned refineries saw a 3.55 percentage point rise year-on-year, reaching 81.05% of capacity. Independent refiners also increased their utilisation by 3.02 percentage points, reaching 62.17%.
Maintenance activities
In September, the refining sector in China experienced a notable shift in maintenance activities. According to the leading consulting firm, a total of 14 refineries across the country underwent planned or unplanned shutdowns for maintenance purposes.
This figure represented a slight decrease compared to August, when 16 refineries were under maintenance.
The cumulative processing capacity affected by these September shutdowns amounted to a substantial 70.4 million tons per year.
This capacity reduction is a key indicator of the short-term impact on China’s refining output.
Interestingly, this figure was 12.3 million tons per year lower than the capacity affected by maintenance in August, suggesting a less widespread or less intensive maintenance schedule in the more recent month.
These maintenance periods are crucial for ensuring the long-term operational efficiency, safety, and compliance of the refineries.
Seaborne imports
In September, China’s seaborne crude oil imports reached their lowest point since January, experiencing a monthly decline.
This decrease was largely influenced by a significant drop in shipments from Iran, which also hit a low not seen since January, according to Kpler’s data.
Muyu Xu, senior crude oil analyst at Kpler was quoted in the Reuters report:
The month-on-month decline mainly reflected tight import quotas for independent refineries, which curbed purchases of Russian and Iranian barrels, while narrower arbitrage in June also reduced inflows from Brazil and West Africa, which were loaded in July and August.
China’s crude imports rose by 2.6% to 423 million tons in the first nine months of the year, driven by ongoing stockpiling efforts.
In September, imports of natural gas, encompassing both pipeline gas and liquefied natural gas (LNG), experienced a 7.8% year-over-year decline, totaling 11.05 million tons.
In the first nine months, China’s LNG imports decreased by 6.2% year-on-year, totaling 92.86 million tons.
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