Refiner trims target

Weaker market demand means Sinopec Zhenhai Refining & Chemical is cutting its 2005 annual refining throughput target by four million tonnes to 16 million tonnes.

Sun Weijun, chairman of the crude oil refining and fertiliser-making subsidiary of Asia's largest refiner China Petroleum & Chemical (Sinopec), said the original target was set on the back of strong refined oil demand in the first half of 2000.

'But in the second half of 2000, especially in the third and fourth quarter, inventory has increased substantially and demand was less than originally expected, so now we only aim for 16 million tonnes in 2005,' he said.

The company posted a 53.9 per cent year-on-year rise in first-half net profit - to 452 million yuan (about HK$423.66 million). It aims to process 11.8 million tonnes by the end of the year - up 10 per cent from last year's 10.73 million tonnes. In the first half, it refined 5.6 million tonnes of oil, a 13 per cent year-on-year rise.

Refining profit margin averaged US$4.15 per barrel in the first half, lower than US$4.34 in the first half last year, but higher than the US$3.93 for the whole of the year. The lower full-year margin was due to an unusual third-quarter phenomenon when the petrol price was lower than the price of crude oil.