China’s Gasoline Demand Falls Post Lunar Holiday

China’s gasoline demand is slowing down after the Lunar New Year travel rush, resulting in independent refineries in the eastern Shandong province to reduce crude throughput, sources told S&P Commodity Insights.

• The independent refineries in Shandong are the swing gasoline suppliers in the domestic market. Their crude throughput rose to a three-month high in January on higher demand and improved margins.
• January throughput at Shandong independent refineries rose by 5.8% on the month to 9.14mn tons, or 2.16mbp, to meet strong travel demand, JLC data showed. The volume also increased 1.9% year on year.
• Gasoline output from these refineries was at 660kbpd last month, the highest in six months, the data showed.
• "We saw strong replenishments for gasoline prior to the Lunar New Year until the third day of the holiday, but not much after that," a source said.
• Two refineries with a combined capacity of around 5.2mn t/yr were shut for maintenance this month, likely weighing on throughput.
• Average utilization rates at Shandong independent refineries was at 59.4% in the week to 21 February, around one percentage point higher on the week, but well below the January average of 63.18%, JLC data showed.
• However, improved margins could prevent throughput from falling further, an analyst said. Shandong independent refineries' weekly refining margin from processing imported crudes was around Yuan 83/mt ($1.58/b) as of 21 February, higher than Yuan 14/mt as of 31 January, JLC data showed.