Low Profits of Shandong Independent Refineries’ Reforming Units

According to the calculation model of SCI, the average profit of the reforming units at Shandong independent refineries was RMB 75.5/mt, hitting a low level since the middle of March 2018.

In 2019, the reforming units’ profit went down gradually, mainly because of the increase in feedstock naphtha prices and the slowdown increase in gasoline prices. Only in early January, the gasoline prices increased a lot, but after that, the gasoline prices fluctuated downwards. But in the meantime, some refineries ran their units at low operating rates during the Spring Festival holiday, and this led to the tight supply of naphtha.

It is predicted that the gasoline price will not increase greatly in March, as the market demand for gasoline will be stable and state-owned companies are reducing their gasoline procurement from independent refineries. At the same time, the market supply of naphtha is still lower than the normal, and this will support the naphtha price. Accordingly, SCI holds that Shandong independent refineries’ reforming unit profit will remain at a low level in March.

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