Chinese refineries processed an average of 12.43 million barrels daily last month, a little lower than the September record of 12.49 million bpd but still the second-highest monthly throughput rate on record, Reuters reports, citing data from the National Bureau of Statistics.
The increase came on the back of higher demand for fuels amid still strong economic growth, but also on the back of higher demand for crude oil inventories ahead of the start of winter. The October figure was 4.6 percent higher than a year ago. The figure for January to October, 12.13 million bpd, was 7.8 percent higher than the rate for January-October 2017.
The news about the still strong run rates after the record-breaking September figures bodes well for future demand after an extended period of falling imports and run rates amid summer maintenance season and adjustments by independent refiners to a new tax regime that has stripped teapot refiners of some tax incentives and hurt their bottom lines.
And these developments are not just short-term. China will lead global refinery capacity expansion and investments with 3.12 million bpd additional refining capacity and US$67.3 billion in capital expenditures through 2022, data and analytics company GlobalData said in a recent report. Ten new refineries are scheduled to launch by 2022, which, some industry insiders have warned, will leave the country with stranded capacity at some later point.
For now, demand remains strong, and this means that imports will remain strong as domestic production suffers high production costs and natural depletion: in October domestic crude oil production rose by a modest 0.3 percent to 16.09 million tons, or an average of 3.79 million bpd. There have been worries that demand in China would suffer a blow because of the trade war with the Trump administration, but it remains strong for the time being.
By Irina Slav for Oilprice.com
