SINGAPORE: China’s Sinopec plans to raise crude throughput next month by 100,000 to 150,000 barrels per day (bpd) from January to meet a rise in travel demand during the Lunar New Year holiday and compensate for run cuts at independent refiners, trade sources said.
The increase equates to 2% to 3% of Asia’s largest refiner’s average throughput last year of 5.05 million bpd.
Sinopec did not respond to a request for comment.
The output hike comes as China’s independent refiners in the refining hub Shandong province have cut throughput to just 50% to 55% of capacity since earlier this month, according to estimates from traders and consultancies, the lowest since mid-2024.
Independent plants, known as teapots, face higher crude oil costs amid tougher US sanctions on Russian and Iranian oil exports.
Some smaller players have halted production in January or plan to in February as new Chinese fuel tax measures push them deeper into losses.
Sinopec is also likely to be building fuel inventories ahead of planned refinery maintenance at several subsidiaries starting at the end of February, one China-based trade source said.
At least 700,000-bpd of Sinopec’s crude processing capacity will be offline from mid-March through May at subsidiaries including the Yangzi, Jiujiang and Gaoqiao refineries, according to data compiled by Reuters based on industry and trade sources.
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Demand for transportation fuel is expected to rise during the Jan. 28 to Feb. 4 Lunar New Year break, when millions of Chinese people travel for family reunions or leisure.
Sinopec said last week that its 2024 throughput fell 2% from 2023, in tandem with a broader and rare decline in Chinese refinery output as the world’s second-largest refining industry contends with a faster-than-expected peak in fuel demand.
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