Sinopec cuts aroms output to boost gasoline

28 March 2008 09:03  [Source: ICIS news]

SINGAPORE (ICIS news)--Sinopec has cut aromatics output at its largest refinery in China to boost gasoline supply, but the move has had limited impact on the market so far, company sources and traders said on Friday.

Subsidiary Zhenhai Refining and Chemical, which operates a 20m tonne/year refinery in Ningbo, Zhejiang province, cut its aromatics output by 5,000 tonnes this week, a company source said.

Yangzi Petrochemical has shut down its aromatics unit in Nanjing, Jiangsu province, for a turnaround, company sources said.

"We will restart the unit after around one month, but it is unclear if we will keep it at a normal operating rate after the restart," a Yangzi source said.

The aromatics cuts would tighten supply locally and boost prices, but imports were unlikely to increase as supply and demand was balanced, a Sinopec source said.

However, toluene and mixed xylenes traders in South Korea and China expected the impact on regional prices and imports to be limited.

"I don’t think there will be much impact on the market here and that prices can increase," an east China-based trader said.

But a second trader believed there could be some interest to import toluene, adding that a few customers expected a price rise and a tightening in local supply.

"Some traders are thinking whether or not they should import," he added.

It was unclear when normal operations would resume, but the Sinopec source indicated that the gasoline and diesel shortages in China might improve in the first half of April.

Sinopec also did not have to repeat a round of cracker output cuts that was carried out late last year to ensure petroleum product supply, he added.

Production at other subsidiaries like Qilu Petrochemical and Shanghai Petrochemical was unaffected so far, sources said.

"Our aromatics capacity is small compared with other companies’, so we will keep it at normal production," a source from Qilu Petrochemical said in Mandarin.

Mahua Chakravarty, Judith Wang and Dolly Wu contributed to this article.

For more on aromatics, visit ICIS chemical intelligence

By: Florence Tan
+65 6780 4359

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 27 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly