MOSCOW (MRC) -- Japanese oil refiner Idemitsu Kosan Co more than halved its profit forecast for the three years to March 2023 as the COVID-19 pandemic hit fuel demand, forcing it to make a tougher assumption for longer-term demand, reported Reuters.
Idemitsu revised its 3-year business plan unveiled in November 2019, now predicting an accumulated net profit of 220 billion yen (USD2 billion) for the three years ending March 2023, instead of its earlier target of 480 billion yen.
“It has only been a year and a half, but the environment has undergone tremendous changes with the unprecedented crisis of coronavirus pandemic, green recovery and carbon-neutral declaration by the Japanese government,” Idemitsu President Shunichi Kito told a news conference.
The company now estimates local demand for petroleum products will fall 30% by 2030 from 2019 levels, and 80% by 2050, instead of its 2019 assumption of 20% and 70% respectively.
“But we want to work positively by taking this as a turning point and an opportunity,” Kito said, citing a plan to turn some of its refineries into platforms for advanced materials such as lithium solid electrolytes and for cleaner fuels such as renewable energy, hydrogen and ammonia.
The company also aims to achieve carbon neutrality by 2050 through energy and material transition, including a plan to slash its thermal coal output by making no investment in new mines. Idemitsu, however, will continue the development of natural gas assets in Vietnam and other Asian countries to meet growing demand for the fuel, Kito said.
For the year to next March, Idemitsu forecast a 143% increase in net profit to 85 billion yen, with an estimated refinery run rate of 83%, up from 78% a year earlier.
Its domestic sales and exports of fuels are expected to rise 2.6% and 6.6% respectively.
As MRC informed earlier, Japan's Idemitsu Kosan took off-stream its naphtha cracker in Japan for a turnaround on September 7, 2020. The cracker remained under maintenance by end-October, 2020. Located at Tokuyama, Japan, the cracker has an ethylene production capacity of 690,000 mt/year and propylene production capacity of 110,000 mt/year. Idemitsu Kosan also operates another cracker in Chiba, Japan, with an ethylene production capacity of 410,000 mt/year.
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.
Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC