China’s Dongying Hualian produces bitumen after seven-year halt

29 May 2013 09:50  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Dongying Hualian Petrochemical resumed bitumen production at its 1.2m tonne/year crude distillation unit (CDU) at Dongying in Shandong province on 25 May after a seven-year halt, a company source said on Wednesday.

Before the restart of bitumen production, the company was producing petroleum coke and distillates to enjoy better margins, the source said.

The producer switched back to producing bitumen, because the distillates markets have been extremely weak this year, the source added. 

Dongying Hualian is using Merey crude as the feedstock to produce AH-70 bitumen, with daily output at around 1,000 tonnes.

The company is offering its product at yuan (CNY) 4,650/tonne ($760/tonne) ex-works (EXW), the source said.

With the resumption of Dongying Hualian’s bitumen production, daily bitumen output in Shandong has increased by 7.5% to 14,200 tonnes, making the province the largest bitumen-producing centre in China, ICIS C1 data showed.

However, the current oversupply in Shandong is expected to worsen, according to market sources, as demand from the province and neighbouring regions has been slow.

Meanwhile, the inflows of low-priced bitumen from east China have had an adverse impact on the Shandong market, an industry source said.

Dongying Hualian, a subsidiary of Fuhai Group, has another CDU with a crude-refining capacity of 400,000 tonnes/year.

($1 = CNY6.12)

By: Jessie Yang

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