Singapore Exchange to launch SM and MEG swaps and futures contracts

MOSCOW (MRC) -- The Singapore Exchange (SGX) will be launching new styrene monomer (SM) and monoethylene glycol (MEG) swaps and futures contracts on October 23 this year, according to Apic-online with reference to SGX.

This will be the first time derivative contracts for SM and MEG have been offered by any clearing house in Singapore.

The swaps are to be traded in 500 mt lots, while the futures contracts will trade in 100 mt increments.

"SM and MEG have traditionally been traded on an over-the-counter (OTC) basis between counterparties," an SGX spokesman said.

Benefits of trading SM and MEG derivatives contracts on SGX include reduced counterparty risk, no delivery risks, as well as margin offsets with other SGX petrochemical products such as benzene, according to an SGX presentation.

"The correlation between SM and benzene is typically about 80%," an SGX spokesman said.

"SGX will also be able to provide a single clearing arrangement for clients to trade and clear with multiple counterparties," the spokesman said.

"Also, currently there is no clearing house that offers US dollar based SM and MEG derivative contracts. These new products will fulfill the industry's need for such risk management instruments," the spokesman added.

China Sept crude oil, gas imports jump ahead of winter fuel demand

MOSCOW (MRC) — China’s September crude oil imports climbed to the second highest level on record, while natural gas imports rose nearly 5%, official customs data showed on Friday, as the world’s top energy consumer shored up fuel supplies for winter, said Reuters.

For the year to date, gas imports were 48.38 MMt, up 22.3%, data from the General Administration of Customs showed. Gas arrivals last month reached 5.94 MMt, up 3.7% from a year ago and up 4.9% from August.

China is preparing to heat millions of homes with gas for the first time, which has stoked demand for LNG imports, as they are cheaper than domestic supplies.

"More demand for the clean fuel from winter heating and massive gasification projects, especially in provinces such as Hebei and Henan, will push imports to a fresh record in the fourth quarter," said Liang Jin, an analyst with commodities consultancy JLC said. Asian LNG spot prices LNG-AS have soared 57% since March to $8.50/MMBtu on growing demand for gas in the world’s second-biggest economy.

Crude oil imports C-CNIMP-PRM rose 12% in September to 37 MMt, or around 9 MMbpd, up from an eight-month month low in August, boosted by buying from China National Offshore Oil Corp’s new refinery and a fleet of independent refiners.

Year-to-date, crude buying rose 12% from a year ago to 318 MMt, or 8.5 MMbpd, a record high. “September imports were higher than expected. The support mainly comes from CNOOC’s Huizhou refinery which just started and some teapot plants returning from maintenance,” said Harry Liu, downstream expert with consultancy IHS Markit.

Liu expects imports through the fourth quarter to average about 8.6 MMbpd, with import growth to ease due to a domestic surplus of refined fuel. "The government’s fuel export quotas are having an impact on refinery throughput and subsequently on crude oil imports," he said.

Total oil product exports in September fell 11% to 3.82 MMt from a year ago and dropped 17% from August. The Commerce Ministry issued a fourth batch of refined product export quotas in late September to ease oversupply in the domestic market.

Major refiner Sinopec and PetroChina have applied for extra quotas to export more gasoline, diesel and jet fuel before the end of the year, sources told Reuters.

Record US oil exports set to surge further

MOSCOW (MRC) — Already record US oil exports are set to surge further in the coming month as stored oil in one of the world's last areas of excess stockpiles pours into global markets, the chief executive of trading house Mercuria, Marco Dunand, as per Reuters.

The US shale oil revolution upended global energy markets, and in late September the country's oil exports hit a record 1.98 MMbpd. But Dunand said the surplus of oil in tanks meant more was likely to come. "I think the volume that's going to be exported from the US in the next two or three weeks is unprecedented in size," Dunand told the Reuters Global Commodities Summit, adding levels could hit 2.2 MMbpd.

"Looking at the vessel fixtures of recent times, I think we're going to see record exports over the next month." The United States lifted its nearly 40-yr ban on oil exports in late 2015. As US crude production continues to rise, its oil has found buyers in nearly every refining hub from Europe to Venezuela to China and India.

Dunand said after "hundreds of millions of barrels" had departed tanks and floating storage elsewhere in the world over the past year, the United States is an outlier of excess. "The US has an excess of crude stocks. Product stocks are more or less in line," Dunand said. "The rest of the world, crude stocks are more or less in line. The excess of crude stocks to rebalance the market naturally has to find its way."

In July and August, the Brent and Dubai crude contracts flipped into backwardation, a market structure in which immediate prices are higher than those in the future. This structure suggests markets are balanced or in short supply. But US crude futures remain in contango, a structure in which later prices are above the prompt level, indicating there is still a surplus.

"If you have backwardation in Dubai, backwardation in (Brent) and a contango in WTI (West Texas Intermediate crude), it's telling you that some of the WTI excess has to move to other places," Dunand said. "Some of those US barrels are going to go into Europe, and some into Asia. Asia is going to absorb a fair amount of that crude," Dunand said.

Still, he said the market was prepared to absorb the exports without significantly weighing on global price benchmarks. "The refiner will go and buy the cheapest possible barrels."


Ineos running at 50% at 545,000 mt/year ACN Texas plant

MOSCOW (MRC) -- Ineos Nitriles is currently running two reactors at its 545,000 mt/year Green Lake plant in Texas, as per Apic-online with reference to a company source.

"We are currently operating 50% and we are currently operating two reactors," he said. He declined to give further details or confirm any future plans.

Several market participants said they expect Ineos to start running the whole plant this week. The plant began at the end of September.

Ineos declared force majeure on acrylonitrile from its Green Lake plant early September after disruption by Hurricane Harvey.

As MRC informed before, in September 2016, Ineos Enterprises completed the sale of Ineos Styrenics, its Expandable Polystyrene Business (EPS), to Synthos S.A. for EUR80m. The sale of the Styrenics business included manufacturing sites at Wingles and Ribecourt in Northern France and Breda in the Netherlands. The three production sites are supported by its technology Centre in Breda, including a research laboratory and pilot plant facilities.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.

Petrochina expresses interest in Iraqs Nassiriya refinery

MOSCOW (MRC) — Petrochina has expressed interest in developing the Nassiriya oil refinery in southern Iraq, the oil ministry said in a statement on Friday, as per Reuters.

A Petrochina executive expressed the company’s interest at a meeting with Oil Minister Jabar al-Luaibi in Baghdad. The refinery is part of a larger project to develop the Nassiriya region’s oil and gas reserves.

The plan provides for increasing the fields’ output and the processing of their production at the new Nassiriya refinery, and to recover the associated gas to supply power stations or process it for exports.