MOSCOW (MRC) -- Japanese refiners have received "larger than expected cuts" in their June-loading term crude supply from OPEC producers, keeping them balanced amid plummeting domestic demand due to the coronavirus pandemic, the newly appointed president of the Petroleum Association of Japan said, as per S&P Global.
The refiners, however, are mulling the possibility of seeking spot barrels when there is supply shortage from the domestic demand recovery in the coming months, Tsutomu Sugimori told a press conference via webcast.
"We cannot disclose degrees of informed supply cuts," said Sugimori, who is president of JXTG Holdings, the parent of the largest Japanese refiner JXTG Nippon Oil & Energy. "It was larger than expected either way."
Saudi Aramco has informed at least one Japanese refiner that it will reduce the refiner's June-loading crude allocations by 20%-40%, with the cuts being made across grades, with larger cuts in heavier grades.
"Considering the domestic demand, which has shrank significantly, we are confident to operate normally with the basis of the current OPEC supply cut for now," said Sugimori.
"However, there is a possibility of facing [supply] shortage considering the domestic demand to recover," Sugimori said. "In such case, we will balance it out from procuring spot cargoes from around the world."
As MRC informed earlier, Japanese oil refiner Idemitsu Kosan expects Japan’s demand for oil products to fall by about 20% in the April-June quarter from a year earlier as measures to curb the coronavirus pandemic reduce jet fuel and gasoline use.
Ethylene and propylene are feedstocks for producing PE and PP.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC