PetroChina has announced plans to permanently retire 19 old refining and petrochemicals units, part of a broader national effort to curb chronic overcapacity that has dragged down profits across China’s downstream sector.

The company, China’s second-largest refiner, disclosed during its third-quarter earnings briefing that one outdated unit failing to meet safety requirements will be closed for good. Eighteen additional units, each running for more than two decades, will also be phased out, according to analysts who followed the call.

China’s refining industry has spent much of the year under pressure from weak fuel consumption and an oversupplied market, conditions that have forced producers into price battles and narrowed margins. The government has been urging refiners and chemical producers to scale back excess output in order to stabilise the sector.

PetroChina’s latest performance highlights the strain: gasoline output between January and September fell by nearly 5% from a year earlier, while diesel production remained unchanged. Jet fuel was the only major transport fuel to post significant growth, with refinery output rising almost 10% as air travel continued to recover.

The company says it is pushing ahead with a shift toward higher-value products and more advanced chemical materials, a strategy aimed at reducing its exposure to the crowded conventional fuels market.

Industry-wide, Chinese refiners and steel producers have been among the weakest performers this year, with earnings squeezed by what officials describe as destructive competition born from years of rapid but imbalanced expansion.

PetroChina’s restructuring move is expected to support Beijing’s broader campaign to rein in overproduction and protect profitability across strategic industrial sectors.