China’s independent refiners reel from tax blow

Preferred feedstocks are now subject to levies, as establishment refiners use political clout to bite back

China’s independent refiners have been a staple of Asia’s trading scene ever since Beijing liberalised crude imports in 2015. Having built their reputations in the mid-late 2000s as important sources of marginal supply—state-controlled refiners having failed to keep up with domestic product demand—China’s independents have grown in complexity, sophistication and profitability. But a new consumption tax is now targeting light cycle oil (LCO), mixed aromatics and diluted bitumen, all feedstocks used by the independents. What are the implications for trade flows? New force Erroneously called ‘teapots’ by some, China’s independents have built sophisticated trading arms over the years, emerging a