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China's 2016 refining capacity to hold at about 16 million bpd: association
[BEIJING] China's total crude oil refining capacity is expected to hold at about 16 million barrels per day (bpd) this year following industry consolidation, but fuel exports are still set to rise amid overcapacity, an industry association said on Tuesday.
The China Petroleum & Chemical Industry Federation (CPCIF), a semi-official entity, said China will add 30 million tonnes of new annual refining capacity, or about 600,000 bpd, in 2016 but also shut a similar amount of inefficient refining units, resulting in a steady total.
Beijing has now allowed about 20 independent oil processors to import crude oil for the first time, turning them into robust new players in the global oil market but adding to the domestic fuel supply.
While granting these independents market access, the government also ordered them to shut down old, inefficient refining units.
Dominant state refiners have over the past few years been scaling back refining expansions because of slowing fuel demand growth.
The refinery utilization ratio, a gauge of the industry's operating efficiency, has dropped to 65.5 per cent in 2015 versus 66.5 per cent in 2014 and 82.9 per cent in 2011, CPCIF said in an industry report released at a seminar on Tuesday.
The association said China is set to ship more refined fuel overseas this year, even after the combined exports of gasoline, diesel and kerosene expanded 30 per cent last year. It did not give a forecast figure.