china’s ‘teapot’ refiners set to slow crude imports as tanks overflow
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

China’s ‘teapot’ refiners set to slow crude imports as tanks overflow

Arab Today, arab today

Arab Today, arab today China’s ‘teapot’ refiners set to slow crude imports as tanks overflow

Independent refiners are under pressure to cut run rates
Beijing/Singapore - Arab Today

As the Organization of the Petroleum Exporting Countries (OPEC) extends production cuts in a bid to tighten the oil market, China’s independent refiners — awash with crude and facing disappointing local demand — are poised to slow purchases of oil for at least the next two months.
The move by China’s so-called “teapots,” a key driver of the country’s crude appetite, will stir concerns about demand in the world’s top oil buyer, which fell from a peak of 9.2 million barrels per day (bpd) in March to 8.4 million bpd in April.
Independent refiners, mainly based in Shandong, are under pressure to cut run rates as profit margins have been squeezed by Beijing’s tighter scrutiny over taxes and shifting quota policies, while some have begun seasonal maintenance.
Plans by state oil majors to bring on new refining capacity later this year will help offset some import losses but lower appetite from teapots and the potential for falling output indicates that the boom among this group of upstart refiners that has transformed China’s oil market may be slowing.
“There will be more shutdowns in June, July and possibly August. It is seasonal but also because the market is not doing well and stocks are plentiful,” said a manager at a Dongying-based independent refiner, who asked not to be named.
Independent refiners, which make up some 12 percent of China’s crude demand, have enjoyed record profits since winning the right since late 2015 to import oil, selling diesel and gasoline throughout Asia while expanding domestic sales in unprecedented competition with state firms.
However, Beijing in January abruptly banned quotas for independents to export fuel, favoring its large state-owned refiners, put in a deadline for new applications for crude oil permits and tightened scrutiny on tax practices, squeezing margins.
Some refineries had rushed to buy crude in the first quarter, worried that they could be penalized for slow use of import permits, said a second teapot manager, who asked to only give his surname Wang.
“There were some over-purchases of crude earlier as (plants) were unsure of the quota policy. Now inventories are high everywhere,” he said.
Some analysts reckon the run curbs may last longer than previously expected. Teapots operated at 58 percent of capacity in April, falling below 60 percent for the first time since October and down from record rates of almost 65 percent in February, according to BMI Research.
“Policy headwinds, domestic competition from SOEs (state-owned enterprises) and insufficient storage infrastructure at major port cities will cap imports,” it said in a research note this week.
Wang said diesel inventories were particularly high in Shandong compared to gasoline. To ease the pressure, his plant planned to shut its 90,000 bpd crude unit through July for an overhaul.
Plans by state oil firms China National Petroleum Corp. (CNPC) and China National Offshore Oil Corporation
(CNOOC) to bring on stream new refineries in Yunnan and Huizhou with a combined capacity of 460,000 bpd, as well as some new approvals for teapot importers, are expected to bolster China’s crude oil imports from August onward, analysts said.
Beijing over April and May has also provided approvals for six independents to import crude with total permits of around 280,000 bpd, although some are still preliminary.
Harry Liu, an analyst at consultancy IHS Markit, estimated China’s total imports have fallen to around 8 million bpd at present but could climb back to around 8.5 million bpd from around August.
“CNPC and CNOOC will contribute the bulk of the increases in refinery runs later this year. Teapots’ contribution will be smaller as the environment for them to grow has got much tougher this year,” Liu said.

Source: Arab News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china’s ‘teapot’ refiners set to slow crude imports as tanks overflow china’s ‘teapot’ refiners set to slow crude imports as tanks overflow

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china’s ‘teapot’ refiners set to slow crude imports as tanks overflow china’s ‘teapot’ refiners set to slow crude imports as tanks overflow

 



GMT 16:16 2014 Wednesday ,10 September

Samirah Ibrahim receives Saudi cultural attaché

GMT 09:32 2017 Sunday ,24 September

China confirms will limit oil exports to North Korea

GMT 19:56 2016 Saturday ,17 September

Typhoon Meranti death toll rises to 28

GMT 09:40 2018 Monday ,01 January

OIC Summit opens in Kazakhstan

GMT 06:37 2015 Monday ,07 December

Iran film directors protest colleague's jail term

GMT 18:37 2017 Friday ,25 August

Mental health issues should be prioritized

GMT 04:39 2017 Thursday ,31 August

Trump vows to right 'self-destructive' tax code

GMT 05:29 2017 Tuesday ,22 August

Celebrations across India on 71st Independence Day

GMT 10:54 2017 Wednesday ,11 October

Child obesity grows tenfold since 1975

GMT 02:31 2016 Tuesday ,06 December

Dubai Women Establishment delegation participates

GMT 04:29 2018 Wednesday ,19 September

North and South Korea: Kim and Moon hail new future

GMT 14:18 2013 Monday ,19 August

Newlywed Lebanese couple pose at car bomb site

GMT 11:11 2011 Friday ,12 August

Palestinian university ranks seventh in Arab world

GMT 15:16 2015 Wednesday ,26 August

UAE ambassador attends charity ceremony in Qalubiya

GMT 16:59 2016 Tuesday ,26 July

Hedge funds in new cycle of oil short-selling
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday