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HomeNewsChina November refinery runs rise year-on-year, but ease from record as sales slow

China November refinery runs rise year-on-year, but ease from record as sales slow

12/14/2018 10:09:43 AM

BEIJING/SINGAPORE (Reuters) - China’s November refinery throughput rose from a year earlier, heading for an annual record, official data indicated on Friday, although the runs eased from highs touched in the previous two months as product inventories swelled and sales slowed.

Refineries in November processed 50.46 million tonnes of crude oil, or 12.28 million barrels per day, up 2.9 percent from the same month last year, according to Reuters calculations based on data from the National Bureau of Statistics.

The daily crude processing rates, however, came off 12.43 million bpd in October and a record of 12.49 million bpd in September, the statistics data showed.

The fall from the September-October peaks came as the government lowered prices for gasoline and diesel in November to track a steep drop in global crude prices, and to counter a sharp slowdown in local sales that started in mid-October.

“China’s state planner lowered gasoline and diesel prices three times in November. Both teapots and state refiners were under pressure to sell products to meet their annual sales target,” said Han Cong, products analyst with consultancy JLC.

She added that private refiners’ utilization rates fell to 63.22 percent in the first week of December from 65.71 percent at the start of November, further indication of the pressure plants are under to scale back operations amid slowing sales.

Still, for the first 11 months, refinery output gained 7.2 percent to 554.48 million tonnes, or 12.12 million bpd, on track for an annual record.

The slowing domestic products sales have also prompted state refiners to seek additional fuel export quotas to release some of the glut.

Crude throughput is still expected to increase over last year levels in December as a new refinery starts up.

China’s private refiner Hengli Petrochemical said on Wednesday it plans test operations at its 400,000-bpd refinery in Dalian on Dec. 15, which is likely to be reflected more fully in the country’s refinery output in January.

GAS AND CRUDE OIL

China’s November natural gas production rose 10 percent to a record of 14.3 billion cubic meters (bcm), the data showed, to cope with heating demand that typically starts every year from around mid-November.

China ramped up both domestic output and imports to meet rising demand from households as the government switched another 3 million households to gas heating this winter.

For January-November, gas output was up 6.6 percent from a year ago at 143.8 bcm.

China is expected to consume 270 bcm of gas this year, the chairwoman of Beijing Gas, the dominant gas distributor in China’s capital, said on Thursday. That represents a rise of 12.5 percent, in line with an earlier estimate by consultancy SIA Energy.

China’s crude oil output in November fell 1.3 percent from the same month last year, and was down 1.6 percent versus a year earlier for the first 11 months, the data showed.

Reporting by Chen Aizhu and Meng Meng; Editing by Sam Holmes and Tom Hogue

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