China Independent Refinery Refined Oil Market Overview

The independent refineries played a more important role in China’soil refining industry in 2018. As of October 2018, the total capacity of CDUsat China’s independent refineries reached 301.46 million mt/a, covering 34.19%of the capacity of all of China’s CDUs. China’s independent refineriescontinued upgrading their feedstock procurement, units’ integration, products’quality, logistics and some other fields.

First, on refineries’ feedstock, a total of 4 independent refineriesgot their processing quotas of imported crude oil in 2018 with the total volume of 8.35 million mt/a. A totalof 40 independent refineries got processing quotas with the total volume of 112.64 million mt/a. In the first nine monthsof 2018, the crude oil processing volume at China’s independent refineries was94.9974 million mt, and over 50 crude oil grades were involved. Therein, thedemand for crude oil from Russia, Brazil andAngola was stable, and the demand for Congo’s Djeno oil and Malaysia’s blendedoil increased greatly. In the meantime, the average operating rate of CDUs atChina’s independent refineries increased to 64.46% in the first ten months of2018, up 3.13% Y-O-Y.

Second, on refineries’ units, China’s independent refineriescontinued optimizing the integration of their units, and some reforming unitsand hydrocracking units were put into production. As of November 2018, thetotal capacity of Shandong independent refineries’ reforming units reached 23million mt/a, up 7.6 million mt/a or 49.35% Y-O-Y.

Third, China is promoting the quality grade of refined oil. Gasolineand diesel must comply with the National VI standard nationwide from January 1,2019. In order to meet the requirements from the quality upgrade, Shandongindependent refineries were active to upgrade their units and technologies. Asof November 2018, over 90% of Shandong independent refineries could produceNational VI standard gasoline, and over 80% of Shandong independent refineriescould produce National VI standard diesel.

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