Sinopec H1 2026: Throughput Down 5.6% Against $92.6 Brent — China Fuel Demand Destruction Is Real
The number that matters: 113.31 million tonnes of crude processed in H1, against 119.97 million tonnes a year ago — roughly 267,000 barrels per day of demand that simply isn't there. This is directly bearish for Dubai/Oman crude. Sinopec cut runs while Platts Brent averaged $92.6/bbl, up 29.1% year-on-year — a price environment that historically incentivizes throughput maximization. That they chose the opposite tells you domestic product demand is structurally worse than the 4.7% GDP growth headline implies.
The profit surge is the distraction. Net profit attributable to shareholders rose 19.3% to RMB 25,627 million; IFRS operating profit came in at RMB 37,210 million, up 11.3%. Earnings recovered on margin and mix, not volume — management pushed product toward high-end carbon materials and refining specialties rather than running flat-out. For crude and product traders, the volume trend is what moves positions, and it's deteriorating in every major category.
Diesel is the sharpest signal. Production fell to 23.46 million tonnes from 24.27 million tonnes (-3.3%), against national diesel consumption that Sinopec reports down 11.5% year-on-year. Industrial activity and road freight substitution are both working against the fuel. Singapore gas oil and ICE Gasoil are directly exposed. Sinopec's H2 domestic refined products sales guidance sits at 77.68 million tonnes — essentially flat against the 79.00 million tonnes sold domestically in H1, with no demand recovery factored in. The Q3 restock trade on Asian gas oil looks structurally thin against that guidance.
Kerosene is the one exception. Production fell 4.9% to 15.53 million tonnes, yet national jet fuel consumption rose 1.3% on holiday travel and international route recovery. Sinopec is restraining output while demand holds — a setup that is structurally supportive for Jet/Kero spreads heading into the autumn travel peak.
Chemicals are the unambiguous bearish call in this report. Ethylene production collapsed 15.5% to 6.394 million tonnes; synthetic resin dropped 16.6% to 9.205 million tonnes; synthetic rubber fell 17.0% to 667,000 tonnes. Light chemical feedstock production — the naphtha-equivalent input — dropped 15.2% to 18.71 million tonnes. Sinopec is not feeding naphtha into crackers because the margin isn't there. Simultaneously, chemical exports surged 70% year-on-year to a historic high, with total chemical product sales at 37.86 million tonnes. That export volume is landing in Asian markets now, which is bearish for PE/PP spreads and a direct headwind for any naphtha crack recovery thesis built on Chinese demand pull. The two signals together — domestic feedstock cuts plus export flood — close the trade from both ends.
H1 capex of RMB 48.7 billion is 58% upstream: E&P absorbed RMB 28.4 billion. The capital allocation is explicit — invest in reserves while crude prices are elevated, run downstream lean. Domestic gas output reached 741.57 bcf (+0.7%), modest incremental supply that continues to pressure LNG import economics at the margin. Oil and gas equivalent production edged to 263.47 mmboe, up 0.3%, as overseas crude fell 8.3% to 12.20 million barrels while domestic onshore held.
What to Watch
- Dubai/Oman physical tenders: Track Sinopec crude buying in August–September. Volume below H2 2025 pace confirms the throughput cut is structural, not seasonal.
- ICE Gasoil / Singapore gas oil crack: H2 domestic sales guidance of 77.68 mt prices in no diesel recovery. A guidance miss to the downside pressures cracks further.
- Asian naphtha and ethylene spreads: 70% chemical export surge means Chinese product is actively landing in export markets. Naphtha crack compression and Asian ethylene assessments are the live gauges.
- Sinopec H-shares (00386 HK): EPS up 19.8% to RMB 0.212. The margin recovery is priced; next re-rating requires either a throughput restart or demand evidence from H2 domestic sales figures.
- Jet/Kero spread: The only bullish setup in the report — output restraint against resilient demand. September IATA China traffic data is the trigger.