China's Jan-Feb refinery output up 15% on solid demand for fuels

OIL AND GAS - BEIJING. China's daily refinery throughput rose 15% in the first two months of the year, from a low base a year earlier, as fuel demand remains solid and refineries rush to hike production ahead of maintenance season.

Refinery processing reached 114.24 million tonnes in the January-February period, data from the National Bureau of Statistics showed on Monday, equivalent to about 14.13 million barrels per day (bpd). The agency didn't disclose numbers for January and February separately.

The daily rate is about the same level as in December 2020, up from 12.07 mln bpd in Jan-Feb 2020 and also above the 12.68 million bpd recorded in the first two months of 2019.

Chinese refineries slashed output in the first quarter last year as the rapid spread of the coronavirus decimated fuel demand.

Chinese refined fuel consumption has staged a strong rebound from coronavirus-induced weakness as the economy recovered and government stimulus kicked in.

Refinery output growth is expected to slow in the second quarter of 2021 as independent plants go off-line for regular maintenance amid weakening profit margins as crude oil prices strengthen.

But the scheduled startup of a 200,000 bpd crude oil unit at private refiner Zhejiang Petrochemical Corp in eastern China will compensate for some of the curbs by smaller independents.

"Runs should slip to below the 13.5 million bpd level through to May. Domestic inventories should see some significant drawdowns in the next two-three months (during a period of) maintenance and robust demand," said Mia Geng, a Singapore-based analyst at energy consultancy FGE.

The latest data also showed China's crude oil production in the first two months rose 0.4% from a year earlier to 32.08 million tonnes, or 3.97 million bpd. That compared with an average of 3.89 million bpd for 2020.

Meantime, China's natural gas output expanded 13.5% in January-February from a year earlier to 34.8 billion cubic metres, extending a jump that saw near 10% growth for full-year 2020.