By an OGJ Online Correspondent
HOUSTON, July 6 -- China will cut refinery runs 20% in July to 15.2 million tonnes in order to reduce high product inventories.
The July total will include 8.25 million tonnes for China Petroleum and Chemical Corp. (Sinopec), 26 million tonnes for PetroChina Co. Ltd., and the balance at local refineries.
In July, Sinopec will be running at 73% of its capacity, while PetroChina will be at 72%.
The government's goal is to cut product stocks to 9 million tonnes by the end of July from the current 12 million tonnes.
The higher inventories were caused partly by slow domestic demand due to fishing ban that started in June and is due to end in September, idling 117,000 diesel-powered boats.
Crude runs in the second quarter also were higher than planned, about 3 million tonnes above the 54.5 million target.
To reduce the pressure of mounting stocks, the government had asked Sinopec and PetroChina to cut runs by 1 million tons in the second half of June -- a 570,000-tonne cut for Sinopec and 430,000-tonne cut for PetroChina.
Also, the government has issued a mandate to limit crude imports in July and August. By early July, it had resold nearly 1 million tonnes of July and August Omani crude cargoes.