Run rates of independent refiners in China’s Shandong province hit a five-month high in November as refining margins remained healthy. An industry survey showed that these independent refiners, also known as teapots, lifted their combined feedstock intake by 0.6% from October to 2.4 million bpd in November. This marked the third consecutive monthly increase in Shandong teapots’ throughput.
According to the survey, Shandong teapots processed 16.985 million tons of Russia’s ESPO, making it their first choice of feedstock over the first 11 months of the year. Norway’s Johan Sverdrup was in the second spot with 8.995 million, followed by Brazil’s Tupi (7.71 million tons) and the UAE’s Upper Zakkum (6.08 million tons).
China’s refining margins for processing imported crudes averaged CNY849 ($133.35) per ton in November, falling from CNY1,185 per ton in October. The decrease was attributed to the decline in gasoline and gasoil prices. However, market participants said refining margins were still healthy despite the fall.
Market sources added that there were signs of easing run rates by the end of November as authorities launched probes on tax issues, which was expected to continue this month. Shandong independent refiners could cut their processing toward the Winter Olympics in Beijing in early February.
