Core Viewpoint - In July, China's naphtha production increased by 6.45% month-on-month to 16.8574 million tons, driven by higher operating rates at domestic refineries, but a decrease in production is expected in August to around 16.7 million tons due to potential narrowing of crude oil processing volume [1][4]. Group 1: Naphtha Production - In July, China's naphtha production reached 16.8574 million tons, marking a month-on-month increase of 6.45% and a year-on-year growth of 6.44% [1]. - From January to July, total naphtha production was 111.9607 million tons, reflecting a slight year-on-year increase of 0.39% [1]. - The increase in July's naphtha production was primarily due to higher operating rates at domestic refineries and the commencement of new production facilities [1][3]. Group 2: Refinery Operations - Domestic refineries experienced varying degrees of increased operating rates due to the recovery from previous maintenance, with Yanshan Petrochemical halting repairs in mid-July, leading to an average operating rate increase of 1.59 percentage points to 82.57% [3]. - Despite some refineries undergoing maintenance, others like Qirun Petrochemical and Haike Ruilin resumed operations, resulting in an average operating rate increase of 0.46 percentage points to 51.33% for Shandong independent refineries [3]. - The overall crude oil processing volume in July rose by 4.96% month-on-month to 63.3238 million tons, significantly boosting naphtha production [3]. Group 3: Future Outlook - In August, naphtha production is expected to decrease to around 16.7 million tons, as crude oil prices are anticipated to fluctuate with a downward trend due to potential demand decline and increased supply [4]. - The operating rates for major refineries are expected to remain stable between 80%-85%, while Shandong independent refineries are likely to maintain a low operating rate around 50% due to ongoing maintenance [4]. - Overall, the crude oil processing volume is projected to see a slight month-on-month decline in August, with limited reduction in naphtha production expected [4].