MOSCOW (MRC) -- SK Innovation Co Ltd, the owner of South Korea's top refiner SK Energy, said refining margins were likely to gradually improve in the second quarter due to recovering demand as the impact of COVID-19 eases, according to Hydrocarbonprocessing.
The company posted an operating profit of 503 billion won (USD444.88 million) in the January-March quarter, compared with an operating loss of 1.8 trillion won in the same period a year earlier.
Revenue declined 16% to 9.2 trillion won from a year earlier. That compares with the 9.9 trillion won forecast of analysts in the Refinitiv SmartEstimate. "Despite the resurgence of COVID-19 in some regions and countries, as vaccinations in the United States and Europe continue, expectations about demand recovery are growing," Lee Dong-yeol, the head of SK Energy's corporate planning office, said in a earnings conference call.
Lee added that refining margins, especially for gasoline, are expected to improve backed by the start of the US driving season in May, while refining margins of jet fuel and diesel are expected to recover in the second half of the year when the United States is set to achieve a 50% vaccination rate.
SK Innovation, which has a total refining capacity of 1.115 million barrels per day (bpd) at plants in Ulsan and Incheon, said it operated at 63% of capacity on average in the first quarter, down from 89% during the same period a year earlier.
As MRC reported earlier, SK Advanced managed to produce on-specification polypropylene (PP) at its new plant in Ulsan, South Korea in the week ending 9 April, 2021. The construction works were nearly completed in late January 2021. The initial start-up date was 20 March, but the company delayed tha launch of the new plant by 3 days until 23 March, 2021. The PP unit is a joint venture between PolyMirae and SK Advanced, using the “Spheripol” process of LyondellBasell, and have an annual output of 400,000 tons/year. The unit is utilizing the propylene output from SK’s 600,000 tons/year propane dehydrogenation (PDH) unit at the same complex.
According to MRC's ScanPlast report, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.