Chinese refinery margins fall as product prices drop

25 May 2012 04:42  [Source: ICIS news]

SINGAPORE (ICIS)--Refining margins of major Chinese refiners declined in the past two weeks as prices of most products fell, according to C1 Energy, an ICIS service in China.

The refining margin is the difference between a refinery’s wholesale income of oil products and its cost of crude.

Based on the integrated ex-refinery price of oil products, the margin for refining Daqing crude averaged minus yuan (CNY) 411/tonne (or minus $8.97/bbl) on 24 May, versus minus CNY189/tonne (or minus $4.14/bbl) two weeks ago.

The gross margin for refining Oman crude, a representative of foreign crude, averaged minus CNY37/tonne (or minus $0.81/bbl) on 24 May, versus CNY164/tonne (or $3.59/bbl) two weeks ago.

The settlement price of Daqing crude stayed unchanged in the two weeks ended 24 May, while the CFR (cost & freight) price of Oman crude dropped by $5.13/bbl or 4.53% in the same period, C1 Energy data showed.

Sales revenues of refined products from the two kinds of feedstock fell by 3.4% and 3.0%, respectively, dragged by cuts in gasoline and gasoil prices.

Major refiners may suffer more losses in early June when the government may reduce oil product prices further amid falling international crude prices, market sources said.

($1 = CNY6.34)

By: Jean Zou
+65 6780 4359

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