China's January-February refinery output up 2.1% on holiday travel, new refinery

Adds analyst quote in paragraph 11, Reuters calculations of refinery output yr/yr change in paragraph 6

By Chen Aizhu

March 17 (Reuters) - China's crude oil throughput in January and February rose 2.1% versus a year earlier, official data showed on Monday, supported by a new refinery and holiday travel, but weak refining margins persisted.

Total refinery throughput in the world's second-largest oil consumer was 119.17 million metric tons, or about 14.74 million barrels per day, according to data from the National Bureau of Statistics.

China combines data for January and February into one release to smooth out the impact of the Lunar New Year holidays, which fall in either of these months each year.

China, the world's second-largest refiner, posted a rare annual throughput drop in 2024 as rapid vehicle electrification and flagging economic growth weighed on fuel demand.

In the first two months of this year, independent refiners in refining hub Shandong known as teapots curbed production to just over half of their capacity, as they faced higher crude oil costs due to tougher U.S. sanctions on Russian and Iranian oil exports.

However, Reuters calculations using year-earlier published data showed the refinery throughput inched up 0.3%, indicating the statistics agency has revised down year-earlier figures.

Holiday travel during the week-long Lunar New Year break helped lift use of gasoline and jet fuel, but diesel fuel stayed under pressure from a protracted property sector downturn.

Refining giant Sinopec in February raised throughput due to holiday travel and to compensate for production cuts at independents, Reuters has reported.

Also supporting output was the newly launched Shandong Yulong Petrochemical refinery, which since last November has operated its first 200,000-bpd crude processing unit at around 90% of capacity after its start-up two months earlier.

The refinery is expected to launch its second 200,000-bpd crude facility this month.

"Reduced runs from the teapot sector are likely to keep state-owned and mega-independent plants' runs supported in the coming months even amid the state-owned maintenance season," said Ye Lin, Beijing-based analyst with Rystad Energy.

Meanwhile, the statistics bureau data showed that China's January-February domestic crude oil production dipped 0.2% on year to 35.04 million metric tons, or 4.34 million bpd.

Natural gas output gained 3.7% in January-February over the same year-earlier level to 43.3 billion cubic meters.

(ton = 7.3 barrels for crude oil conversion)

(Reporting by Chen Aizhu; Editing by Himani Sarkar and Christopher Cushing)

((aizhu.chen@thomsonreuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net))