China’s oil refineries are experiencing a decline in their utilization rates after reaching record levels in the third quarter. This decrease is attributed to two factors: narrowing profit margins and a limited availability of export quotas. As a result, many plants are hesitant to increase their output for the remainder of 2023.
Traders and industry consultancies have observed that the profitability of refining crude oil into various petroleum products has been reduced due to shrinking margins. This, combined with the scarcity of export quotas, has created a challenging environment for Chinese refineries. As a result, these facilities are restraining their production levels, which in turn affects China’s overall oil refinery utilization rates.
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