Sinopec expects lowers 2020 refining runs as coronavirus hits demand

"In terms of refining utilisation rates in the full year 2020, due to the impacts of coronavirus outbreak and exports, our whole year number will be affected," he said

  • Updated On Mar 30, 2020 at 10:11 AM IST
Read by: 100 Industry Professionals
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BEIJING: Asia's top refiner China Petroleum Chemical Corp, or Sinopec, expects that its full-year 2020 refining runs will be lower than in 2019 because of a contraction in Chinese fuel demand caused by the coronavirus outbreak.

The demand contraction will last for the first half of this year and lead to lower full-year demand but refined oil consumption is expected to return to normal in the third or fourth quarter, said Ling Yiqing, vice president of Sinopec, during an earnings call on Monday.

"Due to the impact of first and second quarter, our expectation of the full year consumption of oil products will be negative growth," said Ling.

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"In terms of refining utilisation rates in the full year 2020, due to the impacts of coronavirus outbreak and exports, our whole year number will be affected," he said.

Sinopec lowered the utilisation rates at its crude oil refineries to 66 per cent in February amid the coronavirus outbreak, which was originated in central Chinese city of Wuhan and prompted the government to impose stringent travel bans.

The average utilisation rate at Sinopec's oil refineries was 91.3 per cent in 2019.

Ling also said the spread of the coronavirus overseas will impact oil product exports, negatively affecting Sinopec's oil refining in the second quarter.

The company, which will trim 2020 capital expenditure by 2.5 per cent, was making a detailed plan to reduce capex and would report this in April during first-quarter earnings, said Zhang Yuqing, chairman of Sinopec, on Monday.

  • Published On Mar 30, 2020 at 10:08 AM IST
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