Beijing December 8 2021: An upward trend in refining margins and allocation of new quotas helped lift feedstock imports by China’s independent refiners to six-month highs in November, latest data by S&P Global Platts showed on Dec. 6., as expectations rise that interest for early 2022 cargo arrivals will remain buoyant.
Combined feedstock imports for China’s independent refineries bucked the negative trend and rose 9.8% month on month from October to 14.37 million mt (3.51 million b/d) in November. Feedstock inflows, comprising of crude oil, bitumen blend and fuel oil, had posted a 0.6% month on month drop to 13.09 million mt in October, Platts data showed.
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Refineries have generally increased procurement for cargoes for arrivals in November-December. Quotas allocated in late-October also made it possible for independent refineries to claim their imports.
Higher imports were supported by strong refining margins since October when the supply of gasoil remained tight across the country. In addition, there was no new refinery that went into maintenance in Shandong where small-sized independent refineries are concentrated. This also helped cut feedstock inventories, creating more space for new arrivals.
Combined imports for Shandong-based refineries increased by 8.4% month on month to 9.36 million mt in November, the first month since July 2021, when volumes hit the 9 million mt mark.
“Buying interest for January arrival cargoes has been a bit strong in late-November, after premiums dropped,” said an analyst.
However, some trade sources were of the view that feedstock consumption could take a backseat due to constant checks and investigation by local tax authorities in December.
