Crude stocks hit record high at China’s Shandong ports amid turnarounds
Crude oil inventories at major ports in China’s eastern Shandong province rose to a record high amid more refineries shutting for scheduled maintenance, refinery and port sources told S&P Global Platts on April 29.
Combined inventories stood at a record 6.17 million mt on April 29, up 1.3% from 6.09 million mt on April 22, also a record at the time.
Stocks as on April 29 are also 28.5% higher year on year.
The ports that are part of the count include Dongjiakou, Qingdao, Rizhao, Yantai, Dongying, Laizhou and Longkou, according to data from JLC, a local energy information provider.
The increase in stocks came mainly from Rizhao and Laizhou ports, where the surge reflected a recent turnaround at China Overseas Energy, as well as ChemChina’s Zhenghe Petrochemical.
“The delivery from ports to refinery facilities has been slow due mainly to the maintenance,” said a source with Rizhao port.
In April, shut downs for maintenance will impact refining capacities by around 21.2 million mt/year. This comprises seven Shandong independent refineries, including Lijin Petrochemical, which was scheduled to be shut down on April 29.
Run rates drop
The average run rate at the 43 surveyed independent refineries stood at around 69% on April 28, down by about two percentage points from a week earlier due to maintenance, according to JLC.
New cargo arrivals into Shandong ports have also been lower compared with last month.
A combined 10 million mt of crude have been discharged into these ports as on April 29, about 24.2% down from 13.2 million mt in March, Platts Data showed.
“Refineries’ interest in buying seaborne cargoes have been relatively low,” said a trade source.
However, inquiries for June and July crude cargoes have increased slightly this week, with the premiums for June Tupi cargo offered at $1/b over ICE Brent, DES Qingdao, while July cargoes were higher at around $1.50/b, sources said, as the offline capacity will gradually reduce in June when most of the maintenance is completed.