Risk management firm sees oil demand peaking in 2023

MOSCOW (MRC) - Global oil demand will peak in 2023 as electric vehicles (EVs) become competitive with cars fuelled by petrol and diesel, and after 2040 no new oil developments will likely be needed, quality assurance and risk management firm DNV GL said, as per Hydrocarbonprocessing.

The forecast from the Norway-headquartered firm, which offers certification and consultancy services to around 100,000 customers globally, adds to investors' worries about some oil assets becoming stranded if demand enters into permanent decline.

"Amid declining consumption in the future, we see little scope for adding capacity in high-cost areas, such as in the Arctic," DNV GL said in its long-term forecast, highlighting such a risk.

By around mid-2030s, EVs will account for half of all new light-duty vehicles sold in the world, and 10 years later half of all road transport, light and heavy, will be electric, it added. The transport sector is the main user of oil.

"After 2040 we will likely enter a period where new oil fields are not required to replace depleted fields," DNV GL said, adding that by 2050 oil demand is expected to be about a half of its peak.

Demand for natural gas is expected to grow until the mid-2030s, when capital spending on non-fossil energy will overtake spending on fossil energy, DNV GL said in its report.

"The attention of boardrooms and cabinets should be fixed on the dramatic energy transition that is unfolding," said Remi Eriksen, the group's president and chief executive.

Investors are increasingly worried that some oil and gas assets could be left in the ground as a result of stricter regulations to curb carbon emissions and the fall in costs of renewable energy and car batteries.

Oil majors have different views on possible oil demand peak, but all say that even if demand peaks, trillions of dollars of investments in oil and gas will still be needed to develop new barrels due to the natural decline of existing fields.

Exxon Mobil, the world's largest listed oil company, said on Feb. 2 that oil demand could fall by 25 percent to around 78 million barrels per day (mbd) from the current levels if governments choose to implement measures to limit global warming.

The company, however, did not disclose how efforts to limit carbon emissions would impact its business. In a separate report it said that excluding those climate measures, oil demand is expected to grow by 20 percent by 2040, driven by commercial transport and the chemical industry.

Chinas August oil imports rise 6.5 pct as teapots return to market

MOSCOW (MRC) -- China’s crude oil imports rose 6.5 percent in August from a month earlier to their highest since May, boosted by a rebound in demand from smaller, independent refiners, customs data showed, as per Reuters.

Arrivals last month were 38.38 million tonnes, or 9.04 million barrels per day (bpd), according to the General Administration of Customs. This was up from 8.0 million bpd a year ago and 8.48 million in July and just slightly lower than the forecast of 9.12 million bpd from Thomson Reuters Oil Research.

For the first eight months of the year, crude purchases stood at 299 million tonnes, up 6.5 percent, the data showed.

Independent refiners, known as teapots, wound back their crude buying earlier this year, shutting or suspending operations due to a combination of sinking diesel demand, higher crude prices and new tax rules.

However, a recent rise in fuel prices and improved margins have led to an in increase in crude processing, with many now returning from summer maintenance to gear up for rising winter demand.

Teapot buying in August rose to 6 million tonnes, or 1.4 million bpd, up 40 percent from July, and September arrivals are expected to breach 7 million tonnes, data from Thomson Reuters Supply Chain and Commodities Research showed.

Total gas imports in August were at 7.77 million tonnes, up 5.4 percent from 7.38 million in July, according to the data. In the year to date, imports were 57.18 million tonnes, an increase of 34.8 percent.

The increase comes after state-owned oil companies pledged to take measures in advance this year to prepare for potential shortages during the winter heating season.

Sinopec vowed to increase LNG spot cargo purchases, while CNOOC said this week it would give third-party users access to its major LNG import terminals.

The first deals on PP exports from new polymer plant took place in Turkmenistan

MOSCOW (MRC) - The first lots of polypropylene (PP) and high-density polyethylene (HDPE) from the new gas chemical complex were put at exports trades of the State Commodity and Raw Materials Exchange of Turkmenistan a week ago. But the real deals, and only for PP, took place only a week later, according to ICIS-MRC Price Report.

The first lots of PP and HDPE with a total volume of about 14,100 tonnes were put at the State Commodity and Raw Materials Exchange of Turkmenistan from the new gas chemical complex in the village of Kiyanly (Balkan region, Turkmenistan) on 3 September. But the trader set a fairly high price on the very first day of the trades.

Only a week later due to a noticeable decline in prices, the first deals took place. Potential buyers said the trader set a fairly high level of starting prices a week earlier, polyethylene (PE) and PP were offered at USD1,250-1,300 per tonne, FCA.

Such starting prices were unacceptable for most buyers given the novelty of the material and the unproven logistics.
The starting prices in the export trades were reduced to USD1,100/tonne FCA on 10 September, after which several deals were done for PP shipment with a volume of about 500 tonnes. Buyers were companies from the CIS countries.

Part of the potential buyers still refrained from purchases and waited for the prices at the level of USD1,050-1,060/tonne FCA, because they did not fully understand the real terms of shipments and the final cost of delivery.

Earlier it was reported that the gas chemical complex for production of HDPE and polypropylene with the capacity of 386,000 tonnes/year and 81,000 tonnes/year respectively was built by the consortium TOYO Engineering (Japan) and LG and Hyundai (South Korea). The total cost of the project was about USD3.4 billion.

September prices of European PP grew for CIS countries, but not all sellers raised them

MOSCOW (MRC) -- The September contract price of propylene was agreed in Europe up by EUR40/tonne from August. However, not all European producers announced a proportional increase in export prices of polypropylene (PP) for September shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over September prices of European PP began last week. All market participants reported a number of producers' desire to achieve an increase in export prices of propylene polymers, which is proportional to the amount of the rise in monomer prices for this month's shipments. Some companies said that in a number of cases, they managed to roll over August prices.

Deals for September shipments of homopolymer propylene (homopolymer PP) were negotiated in the range of EUR1,165-1,230/tonne FCA, whereas last month's deals were done in the range of EUR1,165-1,240/tonne FCA.
Deals for block-copolymers of propylene (PP block copolymers) were done in the range of EUR1,240-1,310/tonne FCA.

Some companies said some producers still had restrictions on exports from August due to shutdowns for maintenance.

PE production in Belarus rose by 10% in Jan-Aug 2018

MOSCOW (MRC) -- Belarus's overall production of low density polyethylene (LDPE) totalled 42,800 tonnes in the first eight months of 2018, up by 10% year on year, reported MRC analysts.
According to the National Statistics Committee of Belarus, the local LDPE producer - Polymir reduceded its capacity utilisation in August and produced slightly over 5,500 tonnes of polyethylene (PE) versus 6,200 tonnes a month earlier. Thus, Polymir's total LDPE output was slightly over 42,800 tonnes in January-August 2018, compared to 38,900 tonnes a year earlier.

As reported earlier, the Belarusian producer plans to reach full capacity utilisation at its PE production by late November. Because of the fire at the ethylene unit in June 2016, Polymir was forced to reduce its capacity utilisation at LDPE production by almost two-fold.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as low density polyethylene (LDPE), acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968.
The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries. The plant's annual production capacity is 130,000 tonnes.