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OIL: China Teapot Run Rates Fall to Lowest SInce March 2020

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Run rates at China’s Shandong teapot refineries has fallen to the lowest since March 2020 at 43.64%, according to Mysteel Oilchem cited by Bloomberg.

  • Activity at teapots will likely fall further in February, JLC and FGE said, but could recover in March on improved feedstock availability and higher seasonal domestic diesel demand, FGE said last month.
  • Several refineries have halted operations for indefinite maintenance as a cut in tax rebates weighs on independent refiners already struggling with tight margins due to China’s weak economy and lackluster demand for fuels.
  • The teapots have also suffered from US sanctions on Russia with an impact on ESPO crude from Kozmino and higher costs for cargoes delivered on a non-sanctioned tanker.
  • In the week to Jan. 23, the refining margin at Shandong’s teapots fell to a loss of more than 150 yuan ($20.6) a ton compared to a profit of over 300 yuan a ton a year ago, according to OilChem. 
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Run rates at China’s Shandong teapot refineries has fallen to the lowest since March 2020 at 43.64%, according to Mysteel Oilchem cited by Bloomberg.

  • Activity at teapots will likely fall further in February, JLC and FGE said, but could recover in March on improved feedstock availability and higher seasonal domestic diesel demand, FGE said last month.
  • Several refineries have halted operations for indefinite maintenance as a cut in tax rebates weighs on independent refiners already struggling with tight margins due to China’s weak economy and lackluster demand for fuels.
  • The teapots have also suffered from US sanctions on Russia with an impact on ESPO crude from Kozmino and higher costs for cargoes delivered on a non-sanctioned tanker.
  • In the week to Jan. 23, the refining margin at Shandong’s teapots fell to a loss of more than 150 yuan ($20.6) a ton compared to a profit of over 300 yuan a ton a year ago, according to OilChem.