Chinese July crude imports step back from record high, fall 7% on month

MOSCOW (MRC) -- China's crude oil imports fell from a record high in July, snapping a three-month rally, as sluggish domestic fuel demand due to flooding capped refinery feedstock requirements, reported S&P Global.

Crude imports fell 6.7% to 12.13 million b/d in July from a record high 12.99 million b/d in June, preliminary General Administration of Customs data released Aug. 7 showed.

However, the import volume remained above 12 million b/d for the second time on record, as Chinese buyers who rushed into the market to secure cheap crudes in March/April received their deliveries in the month due to ongoing port congestion.

The country's crude imports grew sharply from 9.72 million b/d in March amid COVID-19 pandemic.

GAC releases data in metric tons, which S&P Global Platts converts to barrels using a 7.33 conversion factor.

On metric tons basis, the country imported 51.29 million mt of crude in July, down 3.6% from June, the GAC data showed.

The month-on-month decline was more likely attributed to the state-owned sector as the crude imports for independent refineries surged to a fresh high of 4.68 million b/d in July from 4.4 million b/d seen in June, Platts data showed.

The high July volume took imports for the first seven months of 2020 to 11.01 million b/d, up 11.5% year on year, amid sustained low crude prices. The value of the crude inflows over January-July fell 23.7% on the year to $138.89 billion, the GAC data showed.

Looking forward in August, China's crude imports are likely to stay at a higher level due to the ongoing port congestion for discharging, analysts said.

Data intelligence firm Kpler said there were 79.16 million barrels of crude on tankers idled in Chinese waters for seven or more days in the week beginning Aug. 2.

The volume was four times of the normal levels seen before May 2020, despite easing from the record high of 88.61 million barrels seen in the week of June 29.

In September and October, however, the inflow volumes were expected to fall significantly as China halts its buying spree for August-loading cargoes amid high domestic stock, Platts reported.

As MRC wrote previously, China’s massive build-up of crude oil inventories this year slowed somewhat in July, but remained elevated by historical standards as imports stayed near record levels.

We remind that Chinese polyethylene (PE) producers have been running plants at around 80-90%, and inventories were heard around 640,000 mt, stable in the first week of August.

We also remind that four large new crackers are poised to start operations in China in the next 3-6 months, in a sharp expansion of the country's petrochemical cracker sector.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

PVC imports to Belarus up by 9.3% in H1 2020

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled 21,300 tonnes in the first six months of 2020, up by 9.3% year on year, according to MRC's DataScope report.

According to the Statistical Committee of the Republic of Belarus, local converters significantly increased their purchasing of PVC in June 2020 under the pressure of seasonal demand for finished products, overall imports totalled 5,600 tonnes versus 2,800 tonnes a month earlier. Russian resin accounted for the main increase in purchasing.

Thus, imports of unmixed PVC reached 21,300 tonnes in January-June 2020, compared to 19,400 tonnes a year earlier.

Russian producers with the share of about 84% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Germany and Ukraine with the share of about 7% and 6%, respectively, were the second and third largest suppliers.


COVID-19 - News digest as of 20.08.2020

1. China slows crude oil storage flows slightly in July

MOSCOW (MRC) -- China’s massive build-up of crude oil inventories this year slowed somewhat in July, but remained elevated by historical standards as imports stayed near record levels, said Hydrocarbonprocessing. One of the few bullish spots in the global oil market this year has been China’s ravenous appetite for crude, with imports for May, June and July being the highest three months on record. And, after a blip caused by lockdowns in the first quarter to combat the spread of the novel coronavirus, refinery processing has also been ramped up to record levels.


PP imports to Belarus down by 0.6% in H1 2020

MOSCOW (MRC) - Imports of polypropylene (PP) into Belarus decreased to about 55,500 tonnes in first six months of this year, down 0.6% year on year, compared to the same period of 2019. The greatest decrease in imports accounted for propylene copolymers, according to MRC DataScope.

June PP production in Belarus exceeded 11,000 tonnes, while in May it was about 8,300 tonnes. Total PP imports into the country reached 55,500 tonnes in January - June, compared with 55,800 tonnes year on year. The demand for homopolymer PP increased, but demand for propylene copolymers decreased.

The structure of PP imports by grades looked the following way over the stated period.

June imports of homopolymer PP reached 7,500 tonnes versus 6,600 tonnes a month earlier, purchasing of injection moulding homopolymer PP rose in Russia under the pressure of seasonal factors. Overall imports of homopolymer PP reached 39,600 tonnes in the first six months of 2020, up by 9% year on year.

June imports of propylene copolymers to Belarus were 3,500 tonnes versus 1,800 tonnes a month earlier, local companies increased their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 15,900 tonnes in January-June, down by 18.2% year on year.


Fire breaks out at Poly-America plastics processing plant in Texas

MOSCOW (MRC) -- A downed power line ignited a fire on exposed plastic film at a Dallas-area storage facility that is expected to burn through at least Aug. 20, reported S&P Global with reference to authorities' statement.

"This is going to be burning late into tomorrow," Bill Murray, Grand Prairie assistant fire chief, said at an Aug. 19 news conference.

The fire ignited at about midnight on Aug. 19 when a power line fell on plastic film in a storage area at at Poly-America’s Grand Prairie plastic processing plant near Dallas, Texas, Murray said. The company manufactures trash bags, plastic drop cloths, plastic sheeting, agricultural films used to wrap hay, barrier films and shrink film made from polyethylene (ЗУ), according to its website.

The fire spread throughout the storage area, he said. Firefighters were not able to secure enough foam to extinguish the blaze, but it was contained and is expected to burn itself out.

Murray said that once the fire burns down to "where it's manageable," crews can use front-loaders to break up the debris that is burning.

"We're going to have to clean out the entire section and wet it down with foam," he said. "We're talking maybe 300 yards worth. It's going to be at least a two-day operation out here before it's completely extinguished."

No injuries or damage to buildings were reported.

As MRC informed earlier, Chevron Corp on Tuesday reported a fire at its 112,229-barrel-per-day (bpd) Pasadena, Texas facility. "At this time, flames, smoke may be noticeable to the community. We are coordinating with local officials, and working to resolve the issue as soon as possible," the company reported.

Poly-America is a large plastic processor that produces several products from polyethylene (PE).

PE is the most widely used plastic in the world, primarily found in packaging including plastic bags, plastic films and geomembranes.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports.