Chinese refiners further slashed crude processing in June, with volumes crumbling to the pandemic lows of 2020 amid Strait of Hormuz supply disruptions and weakening domestic fuel demand.
China’s refinery throughput slumped by 17.7% from a year earlier, to just 12.47 million barrels per day (bpd) in June, according to data from the National Bureau of Statistics published on Wednesday.
That was the lowest processing volume in six years, since the onset of the Covid pandemic in March 2020, according to the data series.
The average run rate for Chinese refineries in May stood at 66.3%, with total volumes processed over the month down by 9.1% on the year to 53.72 million tons, the data also showed.
These volumes further slipped to 51.24 million tons, or the equivalent of 12.47 million bpd, in June, for an average run rate of below 60%.
The slashed refinery runs and processing rates were the result of the lowest Chinese crude oil imports in a decade in June and refiners increasing maintenance rates to curb losses from high input prices amid weak domestic demand.
China’s crude oil imports crashed to a decade-low in June as the reduced flows through the Strait of Hormuz hiked oil prices and reduced refiners’ appetite for costly crude.
Overall Chinese imports of crude oil plunged by 41.3% in June from a year earlier, to just 29.27 million tons, or 7.12 million bpd, according to official Chinese customs data released on Tuesday.
The June volumes hit a decade low as they were at their lowest level since October 2016, according to the data series.
Run rates further slipped in June, to an estimated 57.72%, down by 3.28 percentage points from May, according to data by China-based consultancy Oilchem cited by Reuters.
Chinese refining throughput is set to continue to decline this month, too, as refiners idle more units for maintenance amid weak demand and constrained Middle East supply, per estimates by GL Consulting cited by Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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