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Lower refinery rates could dampen demand for CPP tonnage

20 March 2020

Shandong refinery run rates fell to the lowest in more than five years in 2H February

Refineries in Asia are undergoing or bringing forward turnarounds, with some preparing to cut run rates on slowing demand. Capacity loss due to planned maintenance at Asian refineries is expected to rise 65% QoQ in the second quarter (Platts). More countries have imposed travel restrictions and quarantine measures to contain the spread of COVID-19, resulting in a spike of global flight cancellations and plunge in number of bookings. Refiners are suffering from falling consumption of jet fuel and gasoline, along with declining margins. Independent refineries in Shandong, China were producing at below 50% since February (see chart above). Lower refinery rates in the region could weigh on demand for CPP tonnage.

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