Overcapacity forces China rein in heavy industry growth.

摘要

Chinese refiner Sinopec has reported that the provincial government of Shandong in Eastern China has slapped a ban on all new oil refining projects due to considerable overcapacity that is burdening the industry. The province is home to fully one-third of China's refining capacity, or about 3.78MM b/d, but Sinopec said that according to the province's development and reform commission, "Construction has resulted in a waste of resources, intensified competition, lowered prices, falling economic returns and [a] large amount of idle capacity." The commission noted that in 2012, refinery utilization rates fell to just 55% of total capacity. None of China's big state refining companies have any projects planned or underway in Shandong that might be affected by the move, though sources were uncertain whether or to what degree the plans of smaller independent companies might be affected.