Independent refiners in the Chinese province of Shandong are expected to keep throughput at minimum rates to comply with the province’s mandated power curbs. Industry participants and analysts said the move would put pressure on China’s crude oil demand and imports. Some Chinese provinces are rationing power to industrial and residential users to conserve fuel ahead of the peak winter heating season. At the same time, high gas and coal prices have capped electricity generation.
Industry sources said several Shandong refiners had to completely shut their units amid the power curbs and an environmental investigation by the government since late August. Another refiner said it had cut its throughput by around 1,000-2,000 tons a day due to the power shortage.
As a result, the utilisation rate of 43 private refineries in Shandong decreased to an average of 64.8% in the week ended September 22, compared to 66.3% in September’s first week. Analysts said these refineries’ throughput is unlikely to rebound this month from the 17-month low of 9.45 million tons in August, although some of them come back online after maintenance.
