July 18, 2022 [Reuters] – China’s refinery throughput for the six months to June marked the first annual decline for the period since at least 2011, data showed on Friday, as strict COVID-19 restrictions and fuel export curbs dampened production.
For June, output was 54.94 million tonnes, according to data from the National Bureau of Statistics (NBS), bringing January-June processing volumes to 332.22 million tonnes or 13.4 million barrels per day (bpd), down 6% from a year earlier.
The production in June was equivalent to 13.37 million bpd – up 5% from 12.7 million bpd in May, but about 10% below the all-time high of 14.8 million bpd reached in June 2021.
The month-on-month rebound came as some independent refiners began raising production late in May, after steep cuts between February and April, in response to a moderate pick up in demand as some COVID-19 curbs were eased.
The return of Sinopec Corp’s Yangzi and Hainan refineries from overhauls also contributed to the higher processing, though the state major had to close a 320,000 bpd plant in Shanghai due to a fire on June 18.
China’s demand for refined oil products has been falling since March amid strict curbs to contain the spread of COVID, with gasoline and aviation fuel the worst hit.
But analysts expect throughput to pick up in the third quarter as Beijing tweaks its COVID policy and accelerates infrastructure spending to help revive a flagging economy.
China has already issued fuel export quotas earlier than expected, which could help refiners boost output.
The NBS data showed China’s crude oil production rose 3.6% on the year to 17.19 million tonnes last month, with daily output hitting an all-time high at 4.18 million bpd.
Production in the first six months rose 4% versus a year earlier to 102.88 million tonnes (4.15 million bpd), as national oil firms accelerated developing conventional and unconventional resources on Beijing’s call to boost domestic supply security.
Despite record production, the increase remains marginal as China imports nearly three quarters of its crude oil needs.
Growth in natural gas production, however, slowed to 0.4% in June from a year earlier to 17.3 billion cubic meters, but output year-to-date rose 4.9%.
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