China's refining boom fades and brings fears of overcapacity

Slowing oil demand growth, a changing economy and stricter environmental standards are ushering in a new era for refiners

Over the last decade, it seemed China couldn't build oil refineries fast enough. As double-digit economic growth fuelled a rapid rise in oil consumption, China's major state-owned oil companies and independent refiners went on an unprecedented building spree. Refiners added around 5.5 million barrels a day (b/d) of new oil processing capacity lifting the country's total oil refining capacity to more than 12m b/d, making it easily the world's second largest refiner behind the US. Now, though, China's economy is cooling, oil demand growth is slowing with it and concerns are mounting among refiners that the sector faces a new problem: overcapacity. Refiners worry severe overcapacity could lead