The port arrivals of feedstock, including crude oil, fue oil, and bitumen mixtures, in Shandong Province and Tianjin City imported by independent refineries and traders totaled around 48 million tonnes over January-May, a palpable drop of 13% compared with 2023, per OilChem tracking of the shipping schedule.
The drop was attributed to low CDU capacity utilization rates and poor profits of independent refineries in Shandong and adjacent regions, which directly reduced the demand for feedstock.
Specially, the weekly CDU capacity utilization rates of independent refineries in Shandong averaged 56.06% over January-May, down 7.2% YoY, OilChem data showed. And the theoretical crude refining profits slumped 71.3% from last year and averaged Yuan 287.88/tonne during the same period. Moreover, some refineries' cost was even higher than the theoretical level, aggravating the refineries bearish sentiment.
Source: Mysteel OilChem
From a variety-wise perspective, the arrivals of crude oil took up 80% of the total in the first five months of 2024, followed by fuel oil with proportion of 14% thanks to its diversity in varieties and flexibility in fitting into different refining units. The bitumen mixtures took up merely 6% of the total amidst restricted supply and lackluster downstream demand.
Looking ahead, the feedstock arrivals are projected to rebound in the third quarter with most independent refineries expected to complete their routine maintenance by June, when the capacity utilization rates will stage a rally, which will lift the demand for feedstock. Nevertheless, the arrivals are likely to remain low in June as the refineries' maintenance is still on-going.
Written by Aggie Hu, huchenying@mysteel.com
Edited by Navy Liu, liuchuanjun@mysteel.com