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China data: Russian crudes top independent refiners' supply list in Sep

http://www.chemnet.com   Oct 12,2018 S&P Global Platts
Singapore — Russian crude oil shipments to China's independent refineries surged 90.4% on month to 1.59 million mt in September, replacing Brazil at the top of the suppliers' list for the sector, S&P Global Platts monthly survey showed.

Around 1.39 million mt of ESPO, or 87% of Russian imports in September, had been imported by 10 independent refineries.
The remaining 192,000 mt was of Sokol crude imported by Hongrun Petrochemical.

Russian crudes, which take the shortest voyage to China, is usually the first choice for Shandong independent refineries. ESPO's good yield of gasoil also explains its popularity among independent refineries, which produce more gasoil than gasoline.

"Demand of gasoil has remained strong throughout the month," a refinery source said. The average price of gasoil has increased by about 8.3% to around Yuan 7,600 ($1,101)/mt over September in the Shandong market, according to local information provider JLC.

The good demand was also believed to have, in recent weeks, pushed up the crude premium against ICE Futures on a DES Shandong basis to around $5.3/b for December delivery ESPO cargoes, refinery sources said. It was only around $3/b on the same basis in late August.

Crude arrivals from Russia, however, were still 13% lower from a year earlier.

Brazilian crudes took second place as Chinese independent refineries received a total of 1.49 million mt in September. Lula crudes accounted for 63.7% of total imports from Brazil in September, while Lapa and Iracema crudes made up the remainder.

Noticeably, total crude imports from Brazil have posted the biggest jump of 80% over January-September to 11.99 million mt, Platts data showed.

Crude imports from the top three suppliers -- Russia, Brazil and Angola, totaling 3.87 million mt -- accounted for more than half of the total imports by the sector in September.

Platts' survey covers the barrels imported for independent refineries via the ports mostly in Shandong province and Tianjin, as well as those for the upcoming greenfield independent mega Hengli Petrochemical refinery in Liaoning province and Zhejiang Petrochemical refinery in Zhejiang province.

The 38 crude oil import quota holders surveyed by Platts have been awarded a total quota of 121.91 million mt this year. This accounts for 86.9% of the county's total crude oil import quota allocation for independent refineries in 2018.

Apart from the usual grades, independent refineries had also tried out new grades last month.

Luqing Petrochemical has received its first cargo of Bentara crude from Malaysia, co-loaded with Sarir and Doba that shipped from Sungai Linggi in Malaysia.

According to a company source, the Bentara crude has an API of around 30 and a sulfur content of around 0.5%, which has a high middle distillate yield.

In addition, Chambroad has received its first cargo of Cold Lake from Canada, the second cargo imported by Shandong's independent refineries, after Hongrun Petrochemical's first cargo arrived in August.

Chambroad has been actively exploring crude grades to replace Merey crude for producing asphalt. Prior to this, the refinery had imported Shaikan crude from Iraq in August.

Similarly, Kuwaiti crude was also imported by Dongming Petrochemical, for the same purpose last month.

Following higher imports, feedstock inventory at the major ports of Shandong climbed 5% month on month to around 4.23 million mt as of September 27, data from local information provider JLC showed.

It rebounded from a 13-month low of 4.03 million mt at end August.

The major ports in Shandong are Qingdao, Dongjiakou, Longkou, Laizhou, Rizhao, Dongying and Yantai.
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