Intern reporter | Dai Jingjing
"This year's high oil prices have caused losses for Shandong's local refineries." Recently, Gao Xinwei, a professor at China University of Petroleum (East China) and director of the Shandong Energy Economic Management Research Center, told Jiemian News.
"Crude oil accounts for 70% of the total production cost of refined oil. This year, international crude oil prices have increased by more than 50%, but domestic refined oil sales prices have only increased by 28%." Gao Xinwei explained.
As of the close on July 2, Beijing time, WTI crude oil futures closed up 2.52%, at $108.43/barrel; Brent crude oil futures closed up 2.38%, at $111.63/barrel, up about 45% from the beginning of the year. In March, international oil prices rose to nearly US$140 per barrel.
As China’s dependence on crude oil imports reaches 70%, the domestic refined oil market and corporate refining profits are greatly affected by international oil prices.
According to data from the General Administration of Customs, from January to May, the cumulative domestic crude oil import volume was 217 million tons, a year-on-year decrease of 1.7%, but the import value increased by 53% year-on-year.
Refining costs have risen sharply, coupled with the weak demand for domestic refined oil products in the early stage, resulting in a sharp decline in the cracking spread of domestic refined oil products. The crack spread represents the profit of the refinery, that is, the difference between the ex-factory price of refined oil and the cost of crude oil and other costs.
As of June 15, the domestic crude oil-gasoline cracking price difference was 554.65 yuan/ton, and the diesel-crude oil cracking price difference was 531.01 yuan/ton, both at historical lows in the past three years.
Zhuochuang Information refined oil analyst Wang Neng released an analysis report stating that the crack price difference between gasoline and diesel in May and June was at a low level, reflecting the serious losses of domestic refining, especially the losses of refining gasoline. Refineries production enthusiasm has been hit.
National Bureau of Statistics data shows that domestic crude oil processing volume in April and May was 223 million tons and 277 million tons respectively, a decrease of 10.5% and 10.9% respectively compared with the same period last year.
Compared with main refineries, local refineries are often more affected by high oil prices.
Shandong is the concentration center of domestic refining. Data from Longzhong Information shows that as oil prices fluctuate, the actual refining profits of independent refineries in Shandong have fluctuated sharply this year, falling to negative values many times.
html In April, the operating rate of Shandong local refineries once fell to 50%, a new low in the past 15 years. Since then, as the domestic epidemic situation has improved and demand for refined oil products has increased, the operating rate of Shandong's local refineries has gradually increased to more than 60%. Zhuochuang data shows that as of June 29, the average operating load of Shandong Dilian's primary atmospheric and vacuum units was 65.81%, but it was still about 10.8 percentage points lower than the same period last year.
Facing the overall decline of Shandong local refineries, Gao Xinwei believes that this will promote local refineries to seek ways to reduce costs and develop in the direction of integration, scale, chemical engineering, and intelligence.
"(District refinery) will reduce its operating rate and take the path of chemicals." Gao Xinwei said.
In the past two years, many companies in Shandong Dilian have tried to transform into the chemical industry. According to statistics from Zhuochuang Information last year, refining and chemical companies such as Jingbo Petrochemical, Dongming Petrochemical, Luqing Petrochemical, Jincheng Petrochemical, and Huifeng Petrochemical all have chemical projects under construction or in production.
In January this year, Zhang Shaoguang, Secretary of the Party Committee of Sinopec Qilu Branch, also suggested that local refining companies should grasp the trends of "oil production", "oil conversion" and "oil to special" to promote a new path for refining transformation and integrated refining development.
However, there are still many challenges in the transformation and upgrading of Shandong Dilian.
An industry analyst who did not want to be named told Jiemian News that the transformation and upgrading of local refineries is a process and requires a lot of investment. It is currently difficult for Dilian to raise funds, and it is expected that there will be no major changes in its transformation and upgrading in a short period of time.
"The chemical market is not very good this year. Except for the recovery of the aromatic chemical fiber industry chain, plastics and rubber are not strong. Even if oil refining is transferred to chemical industry, it will be difficult to achieve results." The analyst said.
The team of Wang Guojun, a researcher at the China Merchants Bank Research Institute, pointed out in a report released in April this year that Shandong Dilian still has problems such as small individual size, low integration, and weak overall competitiveness.
“Currently, there are more than 40 traditional underground refineries in Shandong, which mainly produce petroleum products such as gasoline, diesel, liquefied gas, etc. The scale of atmospheric and vacuum equipment is small, and they basically do not have the ability to expand basic chemical raw materials and fine chemicals."The report stated.
Since traditional land refineries do not have obvious scale advantages and technology accumulation in the chemical industry, the high risk of project homogeneity is also a major problem.
The report believes that various competitive factors of traditional land refineries are relatively weak , Comprehensive integration has become the last opportunity to catch up, but there are still many uncertain factors, and the prospects for the transformation and upgrading of traditional land refineries still need to be waited and seen.
In October 2018, the Shandong Provincial Government issued " on accelerating seven major developments." The Implementation Plan for High-Quality Development of Energy-Consuming Industries " mentions that by 2022, the refining capacity of local refining companies located in densely populated urban areas and with a refining capacity of 3 million tons or less will be integrated and transferred.
The plan also requires that, By 2025, the refining capacity of local refining enterprises with capacity of 5 million tons or less will be integrated and transferred in batches and step by step. The crude oil processing capacity of the province's local refining industry will be reduced from the current 130 million tons/year to about 90 million tons/year. The yield of refined oil has dropped to about 40%.
In January this year, Shandong Province Governor Zhou Naixiang stated in the 2022 Provincial Government Work Report that Shandong will ensure that 7.4 million tons of refining capacity will be integrated and transferred in 2022; in 2021, Shandong will withdraw from the integration. The three local refining companies have a refining capacity of 7.8 million tons
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