Oil Trader Collapse Raises Alarm Over China’s Private Refiners
- ‘Teapots’ have piles of debt and need credit to purchase crude
- Hontop Energy went into receivership in Singapore in February
Photographer: Johannes Eisele/AFP via Getty Images
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The collapse of an oil trader linked to one of China’s independent refiners is ratcheting up concern over the financial stability of a sector that accounts for about a quarter of the nation’s crude processing capacity.
Hontop Energy, which purchases oil on behalf of private refiner Shandong Tianhong Chemical Co., went into receivership in February, according to documents filed with Singapore’s accounting regulator. Its demise brings focus onto the financial health of many of China’s private refiners, known as teapots, which have built up massive debt loads to modernize infrastructure and procure crude on a global scale.