China’s top oil refineries are cutting processing for the second month in March due to plant turnarounds, tightening supply as seasonal spring demand starts to kick in, Chinese industry officials said

The country’s 12 major plants, mostly located on the eastern seaboard and making up more than a third of China's refining capacity, will process 6 percent less crude this month versus February at 2.18 million barrels per day (bpd), a survey found.
The bigger-than-usual fall is due to maintenance plans at two of the largest plants, Zhenhai and Gaoqiao, both units of Asia’s largest refiner Sinopec.
Production is expected to drop some 10 per cent at the 200,000-bpd Dalian refinery, a unit China’s of largest oil and gas firm PetroChina, as it prepares to test run a new 200,000-bpd crude unit later this month.
A potential shortage could force refiners to buy diesel on the Asian spot market, though so far both Sinopec and PetroChina are staying away from loss-making imports.
“We are aware of the supply cut but these are necessary maintenance works,” said a Beijing-based Sinopec official. “If a shortage does occur, we will come out and buy.”
China's oil demand, especially diesel, rises from late March in the warmer south of the country as farmers plough the fields for planting. Construction works also pick up steam, driving up use of the transportation fuel.
Most of the plants surveyed, however, will keep operating at full rates or above capacity, hoping that margins will recover if Beijing approves a much-anticipated oil price reform at the annual parliament session due to start on Sunday.
Such a price change may lead to an official increase to the retail gasoline and diesel prices as early as later this month, industry officials have said.
“Things will improve if prices rise after the congress meeting,” said a Sinopec refinery official.
Li Deshui, head of the National Bureau of Statistics, meanwhile, said world oil prices would stabilise in the absence of major new shocks and should not have a big impact on either the global or the Chinese economies.
“Stable global oil prices can be achieved if we all try to avoid major shocks,” Li said on the sidelines of the annual meeting of China's parliament.
He said China would find it hard to hit the target unveiled by Premier Wen Jiabao for a four per cent reduction this year in the amount of energy needed to produce each dollar of national income.