China Energy: 2Q operational review

Research evidence excerpt

China Energy: 2Q operational review

J P M O R G A N Asia Pacific Equity Research

23 July 2026

China Energy

2Q operational review

Sinopec reported 2Q26 operational data which showed sharp downstream Head of Asia Energy & Chemicals |

weakness driven by the Middle East conflict and domestic oil/chems demand Asia EV Battery

erosion. Going into results, we continue to prefer PetroChina (OW)> Sinopec (N) Parsley Ong AC

due to its strong upstream and gas earnings, with Petrochina’s 2Q26 NP potentially (65) 6882-8578

rising to a new quarterly record high of Rmb68bn (+83% y/y, +41% q/q). parsley.rh.ong@jpmorgan.com

J.P. Morgan Securities Singapore Private Limited/

• Review of Sinopec’s 2Q26 operations: As shown in Figure 1, Sinopec’s J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

refinery throughput fell by 11% y/y and 17% q/q, largely in-line with our Michelle Wong

expectations and reflecting Middle East crude supply disruptions, export (852) 2800 8556

restrictions and weak domestic demand. Domestic oil product sales fell by 19% michelle.wong@jpmorgan.com

y/y (-18% q/q), slightly underperforming China apparent demand of about - J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

12% y/y, which we attribute to Sinopec’s heavier exposure to eastern and

Vicky Hsia

southern provinces with higher NEV penetration. (852) 2800 3752

• 2Q ethylene volumes -20% q/q: Sinopec’s ethylene output fell by 23% y/y vicky.hsia@jpmorgan.com

and 20% q/q, and we estimate that Sinopec’s NCC utilization fell to ~70% in J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

2Q26 - the lowest in recent years. This likely reflects reduced naphtha supply

from its refineries and weak domestic PE demand amid elevated prices. We