A drop in crude oil prices is adding a new challenge for China’s refiners – a plunge in the value of their stockpiles. They are already facing slowing economic growth and state controls on prices. A fall in crude prices should typically reduce expenditure and raise profits for refiners, but weak demand is driving down fuel prices and narrowing margins. China Petroleum & Chemical Corp (Sinopec) made about 9% of its revenue in the six months ended June 30 from processing crude oil. PetroChina had almost 8% of sales from refining operations. China National Petroleum Corp (CNPC), PetroChina’s parent, said it would have difficulty in meeting its profit targets this year because of crude oil’s slump, citing high stockpiles. It said it expected oil prices to decline further this quarter. Falling prices could “crush Asian refiners’ margins” if demand for oil remains weak, said Gordon Kwan, Nomura’s head of regional oil and gas research. UOB’s Hong Kong-based Analyst Yan Shi downgraded PetroChina’s stock to sell from buy and its target price to HKD7 from HKD11.60. She kept Sinopec at hold and cut its target price 11% to HKD6.60. Oil demand growth in China is expected this year to be the weakest since 1990 as economic growth slows, Sanford C Bernstein Analyst Oswald Clint wrote in a report.