China’s largest refiner posted a 19.3 per cent year-on-year rise in first-half net profit to 25.63 billion yuan, a result that defies the closure of the Strait of Hormuz and a 5.6 per cent drop in crude throughput. The gain came with a 16 billion yuan inventory write-down and a chemicals segment that remains in the red.
The Strait is shut and throughput fell
Sinopec sources half its crude from the Middle East. The Strait of Hormuz has been largely closed since March, yet the company processed 113.31 million tonnes in the first half, or 4.57 million barrels per day, down from the same period a year earlier. Management said it broadened sourcing outside the region, timed purchases to market conditions, and shifted the product mix toward higher-margin output.
Refining margin surged 44 per cent
The refining margin climbed 139 yuan per tonne to 453 yuan per tonne, a 44.1 per cent increase. Operating profit in the segment jumped 381.5 per cent. The filing notes domestic fuel price hikes lagged crude cost surges, a policy choice that typically squeezes refiners. Sinopec’s ability to expand margins anyway suggests the sourcing and timing shifts were more than marginal.
Chemicals still losing money
The chemicals segment recorded an operating loss of more than 200 million yuan, though losses narrowed by roughly four billion yuan. Ethylene output fell 15.5 per cent to 6.4 million tonnes as the company contends with industry overcapacity and competition from private-sector rivals.
Guidance points to flat second half
Sinopec projects crude throughput of 113 million tonnes for July through December, roughly level with the first half. The company said it “closely monitored changing conditions, dynamically adjusted production and operating arrangements, and effectively responded to unexpected shocks and challenges on multiple fronts.” The inventory provision of 16 billion yuan reflects the volatility in oil and fuel prices over the six months.