Asia’s top refiner China Petroleum Chemical Corp, or Sinopec, expects that its full-year 2020 refining runs will be lower than in 2019 because of a contraction in Chinese fuel demand caused by the coronavirus outbreak, reported Reuters.
The demand contraction will last for the first half of this year and lead to lower full-year demand but refined oil consumption is expected to return to normal in the third or fourth quarter, said Ling Yiqing, vice president of Sinopec, during an earnings call on Monday.
“Due to the impact of first and second quarter, our expectation of the full year consumption of oil products will be negative growth,” said Ling. “In terms of refining utilization rates in the full year 2020, due to the impacts of coronavirus outbreak and exports, our whole year number will be affected.”
Ling also said the spread of the coronavirus overseas will impact oil product exports, negatively affecting Sinopec’s oil refining in the second quarter. The company, which will trim 2020 capital expenditure by 2.5%, was making a detailed plan to reduce capex and would report this in April during first-quarter earnings, said Zhang Yuqing, chairman of Sinopec, on Monday.