Shanghai energy exchange approves delivery warehouses for LSFO futures

MOSCOW (MRC) -- China’s Shanghai International Energy Exchange (INE) has approved four entities as designated delivery warehouses for its upcoming low-sulfur fuel oil (LSFO) futures contract, according to Hydrocarbonprocessing with reference to the company's statement.

The entities were listed as Sinochem-Xingzhong Oil Staging (Zhoushan) Co., Ltd., Zhejiang Ocean Oil Products Warehousing Co.,Ltd., Dading Petroleum Logistics Co.,Ltd. and Yangshan Shengang International Oil Logistics Co., Ltd.

They will have total approved storage capacity of 570,000 tonnes and active storage capacity of 320,000 tonnes. The storage fee is 3 yuan per tonne each day.

The LSFO contract, with sulphur content lower than 0.5%, will debut on June 22, with foreign investors allowed to participate.

The INE had published rules for its low sulphur fuel oil contract on Wednesday, stating that it will be traded at 10 tonnes per lot with a daily price limit of 5% and a minimum trading margin of 8%.

As MRC reported earlier, China’s Sinochem Quanzhou Petrochemical successfully started up its newly constructed naphtha cracker in Quanzhou, Fujian province on 16 May 2020, setting the company on track to bring its downstream units online by mid of the year. The cracker has an annual capacity of 1 million tons of ethylene.

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.
MRC

MOSCOW (MRC) -- Sinopec is pushing an expansion project that can produce up to 1 million tonnes of ethylene and refined oil annually in Hainan Free Trade Zone, located in South China, said Companynewshq.

It is estimated that this project will fuel growth of downstream industries with more than 100 billion RMB (14.1 billion US dollars) and become a new engine for regional economic development.

On the basis of the original project, ten sets of equipment for chemical production, three sets of equipment for oil refining as well as supporting facilities will be built.

The project will also support Hainan in accelerating the development of leading industries including energy storage and petrochemical production, and effectively expand the scale of import and export.

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

1. Indian Oil aims to operate refineries at 90% capacity in June

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, aims to operate its refineries at an average 90% capacity in June as fuel demand recovers with the easing of a coronavirus lockdown, the company said, said Reuters. IOC, which along with subsidiary Chennai Petroleum Corp , controls about a third of India’s 5 million barrels per day (bpd) refining capacity, is operating its plant at about 83% capacity, a sharp increase from 39% at the beginning of April. Refiners in Asia are cranking up runs as the lifting of lockdown restrictions is pushing up fuel demand. India’s fuel consumption in May increased significantly from April.

MRC

MOSCOW (MRC) -- The June contract price of propylene was settled in Europe up by EUR60/tonne from the previous month. Nevertheless, European producers are not going to increase export PP price proportionally for shipments to the CIS markets, according to ICIS-MRC Price Report.

Negotiations on June prices of European PP began last week. All market participants said that European producers have made a significant increase in the export prices of propylene polymers for shipments in the current month, but the price increase does not exceed EUR40/tonne, while propylene increased by EUR60/tonne in the current month in Europe.

Deals for June shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR840 - 900/tonne FCA, up by EUR40/tonne from May. Deals for block copolymers of propylene for June delivery were discussed in the range EUR920-980/tonne FCA.

Some producers had export restrictions, in particular, injection moulding homopolymer PP. But they are not critical for most buyers, since the demand for polypropylene has declined significantly in the last two months.
MRC

MOSCOW (MRC) -- S-Oil, South Korean petrochemical major, is in plans to take off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround, as per Apic-online.

A Polymerupdate source in South Korea, informed that, the company is likely to undertake a planned shutdown, at the unit by early-July, 2020. The unit is slated to remain off-line for about two weeks.

Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

As MRC reported earlier, S-Oil's new residue upgrading complex (RUC) and olefin downstream complex (ODC) was inaugurated at the company's Onsan Refinery in Ulsan, South Korea, in July, 2019. The project, which cost around USD4-billion, involved construction of a plant to upgrade low-value residue oil to high-value gasoline and propylene. The propylene is to be used for the production of 405,000 t/y of polypropylene (PP) and 300,000 t/y of propylene oxide.

Separately, S-Oil and Saudi Aramco, a majority shareholder in S-Oil, signed a memorandum of understanding (MoU) to collaborate on a USD6-billion steam cracker and olefin downstream project. Completion is expected by 2024. PCN earlier reported that the project would include a 1.5-million-t/y steam cracker, which would produce ethylene and other basic petrochemicals from naphtha and refinery off-gas. The downstream units would include the production of polyethylene and PP.

Propylene is the main feedstock for the production of PP.

According to MRC"s ScanPlast report, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC