MOSCOW (MRC) -- Asian refining margins for 10 ppm gasoil fell last Friday, posting their fourth consecutive weekly reduction, while cash discounts for the industrial fuel widened amid muted demand in the physical market, reported Reuters.
Refining margins, or cracks, for 10 ppm gasoil dipped 4 cents to $5.91 per barrel over Dubai crude during Asian trading hours.
Cracks for the benchmark gasoil grade in Singapore have slipped 2.2% this week, Refinitiv Eikon data showed. The cracks remain at their weakest seasonal levels on record, weighed down by a sluggish demand recovery, and steady export volumes emerging from China and India that is keeping the region grappling with ample supplies.
Gasoil exports from India this month are expected to exceed February's total of 1.85 million tonnes, while March-loading diesel exports from China are expected to be in a range of 2.2 million-2.3 million tonnes, Refinitiv Oil Research assessments showed. But traders remain hopeful the gasoil market would strengthen in coming months as COVID-19 vaccinations help governments lift mobility restrictions and industrial activities pick up more steam, while upcoming spring turnarounds at regional refineries would tighten supplies.
Cash differentials for 10 ppm gasoil were at a discount of 24 cents per barrel to Singapore quotes on Friday, compared with a discount of 19 cents per barrel on Thursday.
At the same time, gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 2.4% to 2.36 million tonnes in the week to March 18, data from Dutch consultancy Insights Global showed. - The data showed ARA jet fuel inventories rose 2.3% to 986,000 tonnes.
As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.
We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.
We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
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