Coronavirus lockdowns depress fuel demand worldwide

MOSCOW (MRC) -- Countries around the world have reported steep falls in fuel demand as lockdowns to contain the spread of the novel coronavirus limit the movement of more than 4 billion people, said Hydrocarbonprocessing.

U.S. fuel demand has dropped 28% in the last four weeks, the Energy Information Administration said on April 29. Overall finished motor gasoline demand is still down 44% over the past four weeks from the year-ago period, but a drawdown in stocks in the previous week suggests the consumption declines may be leveling off. Jet fuel demand was down 62%.

China’s crude oil throughput in March sank to a 15-month low of around 11.98 million barrels per day, down 4.6% from a year earlier, National Bureau of Statistics data shows. China National Petroleum Corp (CNPC), Asia’s top oil and gas firm, said on March 19 its refined oil sales in February fell 45% year-on-year. The CNPC’s research arm forecasts Chinese refined oil consumption, including diesel, gasoline and jet fuel, will rise in March by 41% on an average daily consumption basis from February, reaching a monthly total of 21.19 million tons. But, March consumption would still be 19.1% lower than a year earlier, and April consumption will remain lower.

Diesel consumption, which normally accounts for two-fifths of overall refined fuel consumption, declined 24.2% in March from a year earlier, its deepest decline since April 1998, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.PPAC has only provided monthly growth numbers since April 1998. Sales of gasoline, or petrol, fell by 16.4% from a year earlier, the deepest slide since March 1999, the data showed. Jet fuel consumption declined by 32.4% as the lockdown hit air travel. However, cooking gas or liquefied petroleum gas (LPG) sales rose about 1.9% to 2.31 million tons and naphtha sales rose 15.7% to 1.39 million tons. India extended a lockdown of its 1.3 billion people until at least May 3 on Tuesday.

Gasoline consumption fell 80% year-on-year in the last 10 days of March, according to industry body Comite Professionel du Petrole (CPDP). Diesel consumption contracted 75% over the same period. This brought the overall fall in March to 22% for gasoline consumption and 26% for diesel. On April 13, France extended the lockdown of its 67 million population, which began on March 17, until May 11.

Spanish road fuel consumption fell by a quarter year-on-year in March to its lowest since January 1999 as measures to contain the coronavirus stopped vehicles circulating, data from national oil and gas agency CORES showed. Gasoline use fell the most, by 34.4% compared with the same month the previous year. Total gasoline consumption was the lowest registered in the euro zone’s fourth-largest economy since February 1973. Spain's leading fuel distributor CLH reported a 56.3% drop in deliveries of oil products in April to the Spanish market compared with April 2019. Deliveries in April hit 1.5 million cubic metres, with gasoline dropping by 78.6%, automotive diesel by 56.6% and jet/kerosene by 92.8%. [here]

Domestic oil product sales in March fell 11.1% from a year earlier to 2.65 million barrels per day (bpd), Ministry of Economy, Trade and Industry (METI) data showed. Gasoline sales dropped 8.4 percent to 764,112 bpd, while kerosene sales fell 2.4 percent from a year earlier to 304,634 bpd, the data showed.

Jet fuel and kerosene consumption fell by over 66% in March compared with the same time last year. Consumption was also down 24% in the first quarter year-on-year. Gasoil and diesel consumption, which represent the biggest chunk of Italian fuel use, stood at 1.47 million tons last month, down 34.7% compared with March 2019. Quarterly consumption was down nearly 13%. And gasoline demand was down more than 50% to 285,000 tons in March compared with the previous year. In April, demand fell even further. Jet and kerosene demand dropped by over 92% to 30,000 tons. Gasoline demand fell 73.4% to 164,000 tons, while gasoil and diesel consumption dropped nearly 50% to 1.11 million tons.

German oil refineries scaled back jet fuel output by around 26% last month compared with the year before, while raising heating oil production by over 30%, the country’s Mineral Oil Association (MWV) said. Overall, German refinery oil product output in March was only 2.2% lower than the same time last year, the MWV, which represents the country’s 15 refineries, said. Diesel and gasoline output fell by 7.1% and 4.5% respectively.

Fuel demand down 40-45% year-on-year in the past couple weeks, compared with a 65-70% decline earlier in the country’s lockdown, the chairman of the Petroleum Retailers Association told Reuters on May 18.

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

Three US automakers reopened manufacturing plants

MOSCOW (MRC) -- Detroit's big three automakers, Ford, GM and Fiat-Chrysler reopened manufacturing plants this week, which was expected to increase demand for polypropylene and other petrochemicals used by the sector, said S&P Global.

However, 38.6 million Americans have applied for unemployment benefits since mid-March, which market sources expect to make for a slow recovery.

April US housing starts fell 30.2% from March to their lowest seasonally adjusted level since February 2015, and authorized building permits fell 20.8% month on month, US Department of Commerce data released this week, with fallout seen in a sharp decline in PVC demand.

As MRC informed earlier, according to the results of four months of the current year, the global car market decreased by 29.2% compared to the same period last year and amounted to 21 million 012 thousand cars and light commercial vehicles. In April, sales of cars in the world amounted to 3 million 967 thousand units, which is 44.8% lower than the same indicator a year earlier. China remains the world leader in car sales in April with an indicator of 1 million 936 thousand cars, which corresponds to the level of the previous year.
MRC

Chinese provincial official urges shut down of CNPC Dalian refinery

MOSCOW (MRC) -- A vice governor in China’s northeastern Liaoning province appealed to the central government to shut down Dalian Petrochemical Corp, at the annual national parliament conference (NPC), said Hydrocarbonprocessing.

A subsidiary of China National Petroleum Corp (CNPC), the 410,000 barrels-per-day (bpd) plant is CNPC’s biggest refinery and one of the oldest in the country. It is also China’s largest processor of Russia’s East Siberia Pacific Ocean blend crude transferred via pipeline.

The refinery has had several severe accidents in the past decade, including an oil spill in 2010, an explosion in 2013 and a fire in 2017, stoking safety and pollution concerns as it is located less than 10 kilometres from the port city of Dalian.

“I sincerely appealed (to) the industrial ministry and state-owned assets supervision and administration commission to coordinate with CNPC to shut down Dalian refinery as soon as possible,” said Chen Xiangqun, a vice governor at Liaoning, according to the NPC report.

Beijing had vowed in 2017, soon after the fire at Dalian refinery, to relocate all small- and medium-sized chemical plants to planned chemical parks and out of urban areas by 2020, and move the larger plants by 2025.

According to the petrochemical industry layout, CNPC’s Dalian refinery was due to move to Changxing island, where the 400,000 bpd Hengli Petrochemical is located. But there has been no update on its relocation since the layout was jointly issued by the state planner and industrial ministry in 2018.

Chen also appealed during the NPC to allow Dalian city government to choose a new owner for the idled land preserved for Dalian refinery in Changxing island, and to push forward the construction of a new refinery by using the refining capacity of the plants no longer in use.

CNPC did not response to Reuters’ request for comment on Chen’s suggestion.

As it was written earlier, CNPC has started to build a natural gas storage base in the northwestern Xinjiang region, with a total capacity of 5.6 billion cubic metres (bcm). The gas storage base, located in Shanshan county in Xinjiang, is a part of China's planned 20 bcm natural gas centre in the northwest region. The Asian country plans to launch the storage base in 2025.

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

Mitsubishi Chemical invests in French bioplastic development firm

MOSCOW (MRC) -- Lactips (Saint-Jean-Bonnefonds, France), pioneering producer of soluble bioplastic with zero environmental trace, has raised EUR13 million (USD14.3 million) in new capital, said Chemweek.

The round was led by Bpifrance’s SPI fund, managed on behalf of the French government as part of the Investments for the Future Program, and Diamond Edge Ventures, the innovation investment arm of Mitsubishi Chemical Holdings Corp. The new infusion of capital will enable Lactips to ramp up its product development and industrial facilities.

Lactips says it now has the financial resources needed to drive the development of its innovative biosourced, biodegradable and water-soluble solution based on milk protein, providing an alternative for numerous industrial plastics. Lactips will accelerate the industrialization of its plastic pellets and films to offer a wider selection of fully biodegradable and recyclable biosourced packaging. The company will press ahead with its packaging products, to respond to the challenges of micro-plastics ending up in the oceans. In addition, Lactips will be looking to supply certain packaging markets in the food and construction sectors as well as single-use packaging.

“This EUR13 million fundraising is structural and strategic at the same time, thanks to these two new shareholders…Since our company’s inception, we have successfully demonstrated that our innovative material can cover a wide range of applications,” says Marie-Helene Gramatikoff, CEO and co-founder of Lactips. The funds will enable the company to rapidly transition to production phase, while continuing to develop the “planet’s greenest plastic,” she says.

As MRC informed earlier, Mitsubishi Chemical has undertaken a planned shutdown at its naphtha cracker in Japan. The company commenced turnaround at the cracker on May 9, 2020. The cracker is likely to remain under maintenance till end-June, 2020. Located at Kashima, Japan, the cracker has an ethylene production capacity of 540,000 mt/year and a propylene capacity of 270,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC

Air Products names COO

MOSCOW (MRC) -- Air Products has appointed executive vice president Samir Serhan as chief operating officer (COO). Serhan has served as executive vice president since December 2016, and leads the company’s technology, engineering, project execution, procurement, manufacturing, construction, and start-up functions, said Chemweek.

With the appointment as COO, Serhan assumes full profit and loss responsibility for the Americas, Air Products’s largest operating region, representing 45% of total company sales in fiscal-year 2019.

The company previously announced on 21 May that it extended chairman and CEO Seifi Ghasemi's term through September 2025.

As MRC wrote earlier, in December 2014, SIBUR-Khimprom (a subsidiary of SIBUR Holding) and Air Products entered into an agreement to build a new air separation unit in Perm and to supply the facility with locally produced gases. The unit came on-stream in 2016. After the commissioning Air Products will supply industrial gases for SIBUR-Khimprom over the next 20 years.

Besides, we remind that in September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polpropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC