China demand drives Singapore oil storage sales to nearly a year-high

MOSCOW (MRC) -- Crude oil sales from storage tanks around Singapore rose to an 11-month high in March, with nearly half of the volumes going to China and traders clearing inventories ahead of record shipments to Asia expected to arrive in April, said Reuters.

Traders sold a total of 22.6 MMbbl of crude from storage in Singapore, southern Malaysia and northern Indonesia in March, Thomson Reuters Eikon trade data showed. Around half of the volumes went to China, partly to help quench the still-growing demand from the country's independent refiners.

"Strong demand from the teapots played its part, as they feared delays to their June quota renewal, and so (they) over-bought during Q1 2017," said Virendra Chauhan, oil analyst at Energy Aspects.

China started granting independent refiners, sometimes called teapots, crude oil import rights from 2015, resulting in a surge of overseas orders in 2016. That has continued into this year, with China's overall March crude imports hitting a record at nearly 9.2 MMbpd.

Despite the large sales this pulled from Singapore storage, the inventory drawdown does not necessarily indicate that an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production to tighten supplies and prop up prices is bearing fruit.

"It's too early to say (if this means the OPEC output cut is working). Of course China buying almost 600,000 bpd more crude in Q1 2017 has helped, but we don't see that as a sustainable pace of growth," Chauhan said.

There are also concerns that while China's surging imports eat up crude volumes, they may contribute to a fuel overhang as Chinese refiners churn out more products like gasoline and diesel than the market can absorb.
MRC

MOSCOW (MRC) -- Polythylene (PE) bags will be banned in Madhya Pradesh with effect from May 1, according to Plastemart.

The government chaired by the Chief Minister Shivraj Singh Chouhan has approved the proposal of imposing the ban from May 1.

The government has yet to chalk out of a plan, and will impose the ban on only plastic carry bags only and not other plastic related materials.

As MRC wrote before, in September 2012, the Delhi government imposed a blanket ban on the manufacture, storage and usage of plastic bags in the capital, regardless of thickness. That ban curtailed demand for PE film and coating grades, which are the raw materials in the production of plastic bags.
MRC

MOSCOW (MRC) -- Reliance is pleased to announce successful and flawless completion of its Ethane Project, including commissioning of its ethane receipt & handling facilities and ethane cracking, at its Dahej Manufacturing Facility in Gujarat in a world record time of less than three years, said the company on its site.

Reliance is the first company to globally conceptualize large-scale imports of ethane from North America as feedstock for its cracker portfolio in India. The project involved seamless integration of several elements across a complex infrastructure value chain. This includes securing ethane refrigeration capacity in the US Gulf coast; delivery of dedicated Very Large Ethane Carriers (VLECs) to carry ethane from the US Gulf Coast to the West Coast of India;
construction of ethane receipt and handling facilities; laying pipelines and upgrading crackers (to receive ethane) at Dahej, Hazira and Nagothane Manufacturing Facilities.

This successful start-up underlines ours ability to build world-scale capacities and infrastructure using complex technologies, such as marine transportation of cryogenic ethane, handling of ethane at (-) 90 deg.C, supply of ethane to the crackers in an energy efficient way and pump ethane from Dahej to other locations. The execution of this project at this scale and magnitude is a first in the world.

The Shale Gas industry in North America has grown exponentially in the past 5 years. Consequently ethane has become one of the most competitively priced feedstock for US crackers.

The supply of Ethane to our crackers at Dahej, Hazira and Nagothane will provide feedstock security and flexibility, enabling us to select the most optimal feed mix based on market conditions.

This will improve the cost competitiveness of our existing crackers and enable us to optimize the portfolio in a volatile market environment.
MRC

MOSCOW (MRC) -- Output of chemical products increased by 7.5% in the first three months of the year, as per Rosstat's data.

According to the Federal Service of State Statistics, last month's production of basic chemicals grew by 9.4% from March 2016. Benzene and caustic soda accounted for the greatest increase in the output.

268,000 tonnes of ethylene were produced in March, compared to 238,000 tonnes a month earlier. Overall, over 773,000 tonnes of this olefin were manufactured in the first three month of 2017, up by 8.2% year on year. Such a major increase in the output was caused by stable operations of Angarsk Polymer Plant this year, whereas last year the plant shut down its production in early February due to technical issues.

Last month's production of benzene rose to 131,000 tonnes from 117,000 tonnes in February. Overall output of this product exceeded 378,000 tonnes over the stated period, up by 13.6%year on year. The increase in production was ensured by Angarsk Polymer Plant.

March production of xylenes was 45,400 tonnes, compared to 44,000 tonnes a month earlier. January-March output of xylenes was 146,600 tonnes, down by 6.8% year on year.

March production of sodium hydroxide (caustic soda) was 110,000 tonnes (100% of the basic substance), up by 12.1% year on year. Overall output of caustic soda grew to 307,900 tonnes in January-March 2017, up by 12.3% year on year. In February 2016, due to force majeure for ethylene supply, SayanskKhimplast was forced to shut down its caustic soda production, the outage continued until July.

Last month's production of mineral fertilizers was 1.828 mln tonnes (in terms of 100% nutrients), up 8.5% from February. Russian plants produced over 5.368 mln tonnes of fertilizers in the first three months of 2017, up by 8.3% year onyear. Production of all types of fertilizers increased, with potash fertilizers, the output of which grew by 13.9%, accounted for the greatest increase.
MRC

MOSCOW (MRC) -- Oman plans to offer shares in some state-owned downstream energy companies to the public, partly to raise money as low oil prices pressure its finances, Omani Oil and Gas Minister Mohammad bin Hamad al-Rumhy said on Thursday, reported Reuters.

The companies include Salalah Methanol Co and a drilling company, Rumhy told reporters without naming the drilling firm or giving any financial details.

Oman has been considering privatization of a wide range of state firms for several years but has not yet moved ahead with the program, and Rumhy did not say when the initial public offers might take place.

Salalah Methanol, founded in 2006, is owned 90% by state-run Oman Oil Co and 10% by Takamul Investment Co, and has a methanol production capacity of 3,000 tpd, according to its website.

As MRC informed before, Oman Refineries and Petroleum Industries Company (Orpic) plans to raise capacity of its polypropylene (PP) plant to 340,000 tpa of high quality PP from 200,000 tpa. The plant is part of the government's vision to develop the petrochemical industry. It is also part of the efforts made by the Sultanate to diversify sources of national income and benefit from gas production.
MRC