UPDATE 1-Sinopec cutting July ethylene output to boost fuel

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BEIJING, July 2 (Reuters) - Asia's top refiner Sinopec (0386.HK)(600028.SS)(SNP.N) said it will continue to cut ethylene output in July after a reduction in June to boost production of refined oil products and ensure domestic fuel supplies.

China hiked fuel prices by nearly 20 percent on June 20, for the first time in eight months making the sharpest one-time rise ever. The move was to help refiners running deep in the red due to soaring crude oil costs and to curb voracious demand.

However, shortages of fuel, especially diesel, have persisted in some regions and some industrial officials estimated that refiners were still incurring losses of at least over 1,000 yuan for each tonne of refined oil products.

Sinopec plans to reduce July's ethylene production by more than 12 percent after cutting June's by 11 percent, or 65,000 tonnes.

It did not say how much extra fuel could be churned out following the planned ethylene cut in July, but the June cut increased fuel output by 200,000 tonnes.

Sinopec has halted operations of an ethylene unit in its Shanghai Petrochemical Company and all of its Dongfang Ethylene, and delayed the restart of Zhongyuan Ethylene, it said on www.sinopecnews.com.cn.

Meanwhile, maintenance works will continue for two cracking furnaces of the second ethylene unit at its Maoming refinery that had been under repairs due to a fire last month, it said.

Sinopec will continue to adjust its petrochemical production levels in line with the requirements in the domestic fuel market, it added.

(Reporting by Jim Bai; Editing by Keiron Henderson)