Entering the fourth quarter, many factors will push China’s crude oil imports to rise again and set a new historical high. ICIS predicts that China’s crude oil import volume in 2019 is also expected to significantly refresh the historical record and exceed the level of 500 million tons, a year-on-year increase of more than 8%.
Qingdao Port Crude Oil Terminal
In the fourth quarter, all refining forces made concerted efforts , China’s average monthly crude oil imports are expected to soar to at least 44 million tons. Most of the Zhongzitou refineries have completed their maintenance period. Hengli Petrochemical is operating at high load. Zhejiang Petrochemical is considering releasing new production capacity into the market. Local refineries are also hoping to further increase their operating rates and collect crude oil import quotas after maintenance, production restrictions and hibernation in the third quarter. officials, may jointly boost crude oil imports in the current quarter.
Affected by unconventional factors such as typhoons and floods and expectations of production restriction policies in the third quarter, the start-up load of Shandong local refineries was affected to a certain extent, and the psychological expectations for load recovery in the fourth quarter are strong; in addition, near the end of the year, if China The general trade export channel for low-sulfur ship fuel has been opened historically. China will have the opportunity to export and digest more distillate resources, and will also be worried about market glut.
However, at the same time, a large number of energy refinings are competing for the market and thousands of arrows are fired, which will continue to aggravate the oversupply of the refined oil market and some core downstream chemical markets; in addition, after the attack on Saudi Arabia’s upstream core assets, futures and spot prices The significant increase in crude oil risk premiums and procurement costs in the market will also weaken the profit levels of Chinese refiners, forcing some relatively weak local refineries to shrink operations, which in turn will restrict the further release of China’s crude oil imports.
It is worth mentioning that recently, Shandong local authorities have once again tried to apply for refined oil export quotas for local refineries. Once the customs clearance is successful, it will help to open the door to more domestic excess resources and import them into the Asia-Pacific market. Once China’s pattern of “big imports and big exports” is temporarily established, it means that an obstacle to the flow of oil foreign trade has once again been removed, and China’s crude oil imports will continue to increase.
Looking forward to 2020, we are currently in a gap period for new large-scale energy refining projects. Only the products of Sinopec Zhongke’s 10 million tons/year refining and chemical integration project have entered the market, and the intensification of market pressure has temporarily slowed down.
The next round of production peak is expected to occur as early as 2022-2023, including the second phase of Zhejiang Petrochemical, Nanshan Yulong Petrochemical’s large-scale and small-scale project, and PetroChina’s Central Committee project, etc. are expected to finally land. At this point, China The industry high ground for refining and chemical integration may have been seized, and subsequent investors are expected to become more cautious and rational. </p
