China’s Sinopec Group reported an 8.9% drop in first-quarter profit as rising raw material costs and increased competition hurt its petrochemicals business and offset higher fuel sales and oil price.
China Petroleum & Chemical Corp, the formal name of Sinopec, reported net profit of 18.32 billion yuan ($2.53 billion) between January and March on Sunday, according to a filing to the Shanghai Stock Exchange based on standards. Chinese accountants.
The refining giant said crude oil prices fluctuated upwards and domestic demand for natural gas, refined petroleum products and petrochemicals increased from last year, but product profits Petrochemicals remained weak due to increased production capacity and rising raw material costs.
The world’s largest oil refiner by capacity, Sinopec saw its crude oil throughput increase 1.7% in the first quarter from a year earlier, reaching 63.3 million tonnes, or 5.08 million tonnes. barrels per day.
Its refined fuel sales increased 6.5% to 59.81 million metric tons.
Sinopec said production of ethylene, a key petrochemical component, fell 2% during the period, extending a 7.2% year-on-year decline in the same period of 2023, as competition has intensified.
Crude oil production rose 1.3 percent on the year to 70.36 million barrels, while natural gas production rose 6 percent to 350.46 billion cubic feet.
Investment spending amounted to 20.5 billion yuan, down from 23.4 billion yuan a year earlier.
The company allocated 13.5 billion yuan of capital expenditure to its exploration and development segment, mainly to build crude oil production capacities in Jiyang and Tahe, natural gas production in western Sichuan , as well as LNG storage and transportation facilities in Longkou.
It will spend 4.1 billion yuan on refining projects.
Last month, Dong Zhao, CEO of Sinopec, told the CERAWeek energy conference that increased sales of electric cars would reduce demand for refined products in China by 20 million tonnes per year, without giving any calendar.
As a result, Sinopec is interested in new overseas markets and plans to build its first fully controlled refinery overseas in Sri Lanka, according to leading industry sources.
(ton = 7.3 barrels for crude oil conversion)
($1 = 7.2464 Chinese yuan renminbi)
