COVID-19 - News digest as of 12.05.2021

1. Limited flights and a COVID-19 cases in India will keep jet fuel demand below pre-pandemic levels

MOSCOW (MRC) -- Restrictions on long-distance flights and the surge in COVID-19 in India will keep jet fuel demand below pre-pandemic levels over the coming months, even as an easing of lockdown in some parts of the world boosts jet fuel demand, said Reuters. Vaccination success and reduced infection rates in Western countries are allowing travel to resume. It will, however, be dominated by short-haul flights, which account for almost two thirds of the total fuel used by the sector, but on average use around 35 times less fuel than long-haul flights, the International Energy Agency estimates. The result will be jet fuel demand of around 5.8 million barrels per day (bpd) this year, almost 30% higher than 2020, but below the 8 million bpd of 2019 before the pandemic struck, energy consultancy FGE says.

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MEGlobal nominates ACP for June 2021 at USD830 per tonne

MOSCOW (MRC) -- MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in June 2021, according to the company's press release.

Thus, on 10 May, the company said ACP for MEG would be at USD830/MT CFR Asian main ports for arrival in June 2021, which corresponds to the previous month's level.

The June 2021 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its May ACP for MEG at USD830/MT CFR Asian main ports, down by USD100/tonne from April 2021.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, May formular prices for most contract customers were in the range of Rb103,000-117,000/tonne CPT Moscow, including VAT.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
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LyondellBasell lifts FM on PE supplies from several plants in the USA

MOSCOW (MRC) -- LyondellBasell subsidiary Equistar Chemicals has lifted its force majeure (FM) on polyethylene (PE) from petrochemical sites in Texas, Louisiana, Illinois and Iowa, reported S&P Global with reference to the company's letter to customers.

Thus, the FM was lifted in early May, 2021.

Morris, Illinois (HDPE, LDPE, LLDPE, PE Specialties), Clinton, Iowa (HDPE, LDPE), Lake Charles, Louisiana (LDPE, LLDPE), La Porte, Texas (LLDPE) and Victoria, Texas (HDPE) force majeures were all lifted, the letter said.

However, the company applied a strict sales control program from these sites until further notice, as PE supply remains tight in the region.

Polyethylene resin, particularly LDPE and HDPE, have been talked tight by market participants in recent months amid healthy demand, with spot and export resin particularly tight. The severe freeze that hit the US Gulf Coast in February further aggravated supplier output as many companies reduced rates and some shut down.

Chocolate Bayou, Texas (HDPE), Matagorda, Texas (HDPE) and La Porte, Texas (LDPE, EVA) will remain under force majeure until further notice, the company said.

As MRC informed before, LyondellBasell (Houston, Texas), one of the largest plastics, chemicals and refining companies in the world, reports fourth-quarter net income of USD855 million, up 40% year-over-year (YOY) from USD612 million on higher polyolefin volumes and margins. A USD147 million non-cash, lower-of-cost-or-market (LCM) inventory valuation benefit increased net income by USD119 million, or USD0.36 per share. Sales totaled USD7.937 billion, down 3.0% YOY from USD8.179 billion. Adjusted earnings per share of USD2.19 increased 15% YOY from USD1.91 and beat the consensus of USD1.31 as compiled by Zacks Investment Research.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges, like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world"s largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune Magazine"s list of the "World"s Most Admired Companies" for the third consecutive year.
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Marathon trying to find other logistics to ship fuels to customers if Colonial Pipeline outage extended

MOSCOW (MRC) -- Marathon Petroleum, the largest US refiner, can meet its supply commitments for now but is working to find alternative ways to ship motor fuels to the eastern United States if the Colonial Pipeline shutdown is extended, reported Reuters with reference to a company spokesman's statement.

"Marathon Petroleum is working with customers and other business partners to determine potential alternative logistics arrangements in the event of an extended shutdown of Colonial Pipeline," said Marathon spokesman Jamal Kheiry. "At this time, there is no impact to our ability to meet supply commitments."

Marathon operates the 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, and the 578,000-bpd Garyville, Louisiana, refinery.

As MRC informed earlier, a cyberattack last week on Colonial's software shut the company's pipeline system, which moves 2.5 million barrels per day of gasoline, diesel and jet fuel to the eastern and southeastern United States.

We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
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Sinopec gets Q1 2021 net profit of USD2.9 bln versus a loss a year earlier

MOSCOW (MRC) -- Asia’s top oil refiner, China Petroleum & Chemical Corp, also known as Sinopec, swung to a first-quarter (Q1) profit from a loss a year earlier, with net income reaching 18.54 billion yuan (USD2.86 billion), amid a recovery in global oil prices and robust demand for refined oil products, reported Reuters.

The company posted a 19.15 billion yuan loss during the same period last year under international accounting standards, as the coronavirus pandemic hammered fuel consumption.

Its crude oil throughput surged 16.3% from a low-base last year to 62.52 million tonnes, equivalent to 5.07 million barrels per day, as China’s fuel demand returned to pre-pandemic levels. Sales of refined products increased 6.8% year-on-year.

“The company has been dynamically adjusting refined oil product exports in accordance with market changes, and maintaining stable and high operational rates of refining facilities,” said Sinopec in a statement filed to Shanghai Stock Exchange.

It raised output of gasoline and low-sulphur marine oil by 25.7% and 187%, respectively, from the same period last year.

Sinopec churned out 68.41 million barrels of crude oil in the quarter, down 3.2% on the year, while natural gas output surged 16.8% to 291.6 billion cubic feet.

Capital expenditure came in at 23 billion yuan, compared with 13.2 billion yuan during the same period last year. The firm invested 9 billion yuan in upstream exploration sectors, including natural gas capacity construction at the Fuling and Rongwei fields, as well as liquefied natural gas (LNG) terminal expansion projects at Tianjin and Shandong.

Sinopec has said it expects to raise 2021 spending by 23.8% to 167.2 billion yuan.

In a separate statement, the company said it had approved a 29.95 billion yuan investment in an upgrade at its Maoming refinery.

As MRC wrote previously, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) have recently entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
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