China Petroleum & Chemical Corporation (Sinopec), the nation's largest refiner, reported a 2.03% decline in refinery throughput for 2024, attributed to a weakening economy and declining demand for road fuels. This drop signifies a broader trend in China's crude processing rates, with the country facing its first annual decline in refinery throughput in over two decades.
China Petroleum & Chemical Corporation, or Sinopec, experienced a 2.03% decline in refinery throughput during 2024 compared to the previous year, marking the steepest drop for the nation's largest refiner. This decrease, falling to 252.3 million tons, coincided with a broader reduction in China's crude processing rates, a phenomenon unseen in decades. China, the world's leading importer of crude oil, faced sluggish oil demand and imports in 2024.
This trend stemmed from a weaker-than-anticipated economy and waning demand for road transportation fuels. Consequently, Sinopec witnessed a significant slump in diesel production, dropping by 10.27%, and a 5.8% decline in light chemical feedstock production, according to the company's unaudited production preview for 2024. However, oil and gas production at the Chinese state-owned giant saw a positive 2.2% increase. While crude oil output only marginally rose by 0.26%, natural gas production surged by 4.68%. Sinopec's reduced refinery throughput was anticipated by analysts, as China's overall crude throughput also decreased last year. Weaker fuel demand and depressed refining margins in 2024 resulted in the first annual decline in China's refinery throughput in over two decades, excluding the pandemic-induced lockdown year of 2022. Government data released earlier this month revealed that Chinese refiners processed an average of 14.13 million barrels per day (bpd) of crude oil last year, a 1.6% decrease compared to the record 14.7 million bpd processed in 2023, when China emerged from pandemic lockdowns. China's consumption growth slowed due to weaker economic performance and the shift towards electric vehicles (EVs) and liquefied natural gas (LNG)-fueled trucks. Although some of the weakness can be attributed to the economic downturn, the transition to EVs and LNG trucks is permanently eliminating a portion of road fuel demand, analysts suggest
CHINA SINOPEC REFINERY THROUGHPUT OIL DEMAND ECONOMICAL GROWTH ELECTRIC VEHICLES LNG
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