In November 2023, the profit of the refinery was still low, and some of the raw materials of the refinery were tight, and the equipment still had short-term shutdown or negative operation. Domestic fuel oil commodity volume fluctuated down from the previous month. Domestic refinery fuel oil commodity volume in November was 960,400 tons, down 6.10% month-on-month, up 18.02% year-on-year. The domestic fuel oil commodity volume from January to November 2023 was 11,040,500 tons, up 2,710,100 tons, or 32.53%, compared with the same period last year.

The amount of fuel oil in Shandong was 496,100 tons, down 22.52% from the previous month. This month, the fuel oil commodity volume in Shandong region fell significantly compared with last month. The processing profit performance of refineries in the month was still weak, and some refinery installations continued to reduce production and reduce negative, resulting in a sharp decline in fuel oil commodity volume in the region in the month. In terms of slurry, Zhenghe, Huaxing, Xintai and other refineries’ catalytic units were repaired, and the capacity utilization rate of some refineries remained low, and the commodity volume of oil slurry declined slightly from the previous month; In terms of residuum, Jincheng residuum was discharged in stages, Aoxing and Mingyuan units were overseen or operated under low load, and other refineries were burdened by atmospheric and vacuum pressure. In terms of wax oil, this month, Changyi and other refineries to reduce wax external suspension, Aoxing, Mingyuan and other equipment maintenance, some small refineries also reduced negative production, although Lu Qingjiao wax remained stable external discharge, but the amount of wax external performance slightly fell compared with last month. Overall, the fuel oil commodity volume in Shandong region declined from the previous quarter.

The amount of fuel oil in East China was 53,100 tons, up 64.91% from the previous month. This month, the rising demand for Marine fuel in the East China market led to the consumption of residual oil, and the shipment of residual oil increased, while the oil slurry commodity volume was relatively stable, and the overall commodity volume in East China increased significantly.

The fuel oil commodity volume in Northeast China was 196,500 tons, up 16.07% from the previous month. This month, low-sulfur residual oil in Northeast China maintained a stable arbitrage window with other regions, and the export sales of main refineries Beili and Yingkou coking materials increased significantly. On the other hand, the main shipping refinery Haoyang wax reduction coking wax in the first ten days of stable volume, after the refinery catalytic unit started work in the second half of the year, the wax reduction stopped external release, as a whole, the residual oil commodity volume in Northeast China rose, the wax oil commodity volume fell slightly, and the total commodity volume still showed an upward trend.

The volume of fuel oil in North China was 143,000 tons, up 13.49% from the previous month. This month, the output of oil slurry in North China’s main refinery was basically stable, the output of residual oil and wax oil rose, and the overall commodity volume rose from the previous month.

The volume of fuel oil in Northwest China was 18,700 tons, up 24.67% from the previous month. In November, the main refinery residue price in the northwest market was reduced in a step-like manner, the arbitrage window was opened, and the foreign sales volume rose from the previous month.

The fuel oil commodity volume in Southwest China was 53,000 tons, up 32.50% from the previous month. This month, the trend of low sulfur residual oil in the eastern region fell first and then stabilized, the negotiated price of southwest residual oil adjusted with the market, the arbitrage range remained stable, the shipment was OK, and the commodity volume rose last month.

Analysis by product:

In November, domestic fuel oil commodity volume of various products showed a decline, and wax oil fell the most obvious. In January, the commodity volume of wax oil was 235,100 tons, down 11.98% from the previous month; In November, wax oil commodity volume accounted for 24% of the total domestic fuel oil commodity volume, down 2 percentage points from the previous month. The reduction of wax oil is mainly concentrated in Shandong and northeast China.

This month, Changyi Petrochemical in Shandong Province suspended the wax reduction, and the amount of Aoxing wax oil was also greatly reduced, and the overall wax supply in the market declined significantly. In the second half of the second half of the second unit of the main export refinery in Northeast China, Haoye is ready to start, and the wax reduction is converted from export sales to personal use, and the wax oil commodity volume is down, and the wax oil commodity volume is down significantly this month. The commodity volume of residual oil in November was 632,400 tons, down 4.18% from the previous month; Residual oil commodity volume accounted for 66% of the total domestic fuel oil commodity volume, up 1 percentage point from the previous month. Residual oil quality differentiation increased, Shandong local refineries mainly shipped high-sulfur residual oil, the price is low in the market, homogenized competition and refinery processing profits are poor, this month some refineries or shut down, or reduce production to reduce negative, the residual oil commodity volume in Shandong has decreased significantly, while the demand for low-sulfur resources in Northwest, Northeast, North China and other places is reasonable, the residual oil commodity volume has increased to varying degrees. However, the total commodity volume of residual oil in the country showed a downward trend. In November, the oil slurry commodity volume was 92,900 tons, down 6.10% from the previous month; Oil slurry commodity volume accounted for 10% of the total domestic fuel oil commodity volume, down 1 percentage point from the previous month. In Shandong, affected by the shutdown of some refineries of China Chemical and the catalytic unit of Jincheng Petrochemical, the commodity volume of oil slurry fell significantly from the previous month, but some low-sulfur oil slurry was released to the market in Northeast China this month, and the overall decline of oil slurry was slightly offset.

Future market forecast:

In December, the refinery crude oil processing quota continued to be tight, the operating rate will not fluctuate much compared with November, oil slurry, some refinery catalytic units plan to resume production, some of the self-use refinery oil slurry export plan, oil slurry commercial volume may have a small increase; Residual oil is temporarily stable under the influence of a normal and vacuum pressure start, the amount of exportation does not fluctuate much, and the main refinery in Northeast China has no exportation plan for the time being. Overall, the domestic fuel oil commodity volume in December is still a narrow decline compared with this month, which is expected to be in the range of 900,000 to 950,000 tons.