China’s oil product demand to peak by 2025: Sinopec

China's oil product demand is likely to peak by 2025, the country's biggest refiner state-controlled Sinopec said. It expects crude throughputs to increase over the next five years, mainly driven by rising petrochemical output.

Total Chinese refinery capacity is likely to increase by 16.7mn t/yr or 334,000 b/d from 2019 to 17.8mn b/d in 2020, the company's Economics and Development Research Institute (EDRI) think-tank said in its annual outlook report.

EDRI expects refinery capacity to hit almost 20mn b/d by 2025, even as diesel and gasoline demand peaks by around 2021 and 2025 respectively.

"China's oil products will enter a final growth phase before peaking in the next five years", it said.

Oil product yields at traditional state-controlled refineries currently average 60pc, compared with just 40pc at the new petrochemical-oriented independent refinery complexes that have started up in recent years. EDRI expects the average oil product yield at all Chinese refineries to fall to around 56pc by 2025, as more new integrated refineries are commissioned and existing refineries are upgraded.

China's oil product demand this year is likely to fall by 7pc from 2019 to around 307mn t, while crude throughputs will be unchanged at 670mn t (13.4mn b/d), it said. Product demand is forecast to peak at 356mn t by the end of 2025, in light of the growth of electric vehicles and the lingering impact of Covid-19.

New refineries will create another 10mn-15mn t oil product surplus, potentially leaving product exports at as much as 70mn t by 2025, up by 30pc from a forecast 54mn t in 2021. The new output will mainly come from Guangdong, Zhejiang and Jiangsu provinces, leaving the Shandong and northeast China markets under even more pressure to manage their product surpluses, EDRI said.

China&#39;s oil forecasts mn b/d 2019 (actual) 2020 2021 2025 Refinery capacity 17.50 17.83 18.09 19.79 Crude throughputs 13.04 13.42 14.09 15.10 Average utilisation rate (%) 75 75 78 76 Output Gasoline 3.61 3.49 3.73 3.99 Jet/Kerosine 1.14 0.82 1.11 1.47 Diesel 3.57 3.33 3.53 3.68 Demand Gasoline 3.21 3.14 3.44 3.62 Jet/Kerosine 0.83 0.50 0.82 1.17 Diesel 3.16 3.05 3.10 2.97 Source: Sinopec Economics &amp; Development Research Institute

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