China’s refinery output fell 5.4pc last month

SINGAPORE: China’s refinery output fell 5.4% last month versus a year earlier, official data showed on Friday, declining for a sixth consecutive month even with the start-up of a new plant as weak fuel consumption and skinny refining margins curbed processing.

Refiners processed 58.73 million metric tons of crude oil last month, data from the National Bureau of Statistics (NBS) showed, equivalent to 14.29 million barrels per day (bpd).

The September level rose from August’s 13.91 million bpd as some refineries returned from planned overhauls and as a new refinery in Shandong started.

However, Reuters’ calculations based on last year’s NBS figure at 63.62 million tons showed September output fell 7.7%, which suggests the data agency has revised down the year-ago figures.

An NBS data consulting hotline staff reached by Reuters acknowledged that the agency does revise year-ago base figures from time to time, without further elaboration.

Despite year-on-year consumption growth in August following a pick-up in logistics and transportation activity, China’s diesel fuel use has declined amid a broad economic slowdown and with cheaper liquefied natural gas replacing diesel as a truck fuel.

The start-up of China’s newest refiner, Shandong Yulong Petrochemical, in late September may lift refinery output in the coming months as the plant ramps up, opening secondary units after running one 200,000-bpd crude unit. Smaller independent processors in refining hub Shandong last operated at 53.5% of capacity in late September, down nearly 13 percentage points versus a year earlier, according to Chinese consultancy Oilchem.

Output for the first three quarters of the year was 531.26 million tons, or 14.15 million bpd, down 1.6% versus the corresponding period last year, the NBS data showed, in its fourth consecutive decline for year-to-date volumes.

Again, Reuters’ calculations using last year’s reported data of 554.84 million metric tons showed a larger decline of 4.2%.

China’s September domestic crude oil production rose 1.1% on year to 17.07 million tons, or 4.15 million bpd, according to the NBS data.

Year-to-date output was up 2% on the year at 159.87 million tons, or 4.26 million bpd.

Natural gas production rose 6.8% in September over the same year-ago level to 19.3 billion cubic meters (bcm), and output for the year to date grew 6.6% at 183 bcm, the data showed.