MOSCOW (MRC) -- Marathon Petroleum, the largest US refiner, is "hopeful" that the US refining sector will recover as demand for gasoline and diesel picks up, but remains cautious about the impact of the spreading delta variant of the coronavirus, reported S&P Global.
"We are going to have to see how the COVID plays itself out in the second half of the year and (as) we approach another winter season," said Marathon CEO Mike Hennigan on the company's Aug. 4 results call.
Noting the stalled vaccination rate has increased infections, he said "there's obviously going to be some restraint on the demand as a result."
Marathon expects to process 2.67 million b/d of crude in the third quarter, down from the 2.71 million b/d in the second. This is due in part to work planned during the third quarter at its Robinson, Illinois, and Mandan, North Dakota, refineries, and weakening demand.
"We're close to the summer driving season, which is typically our strongest time of year," Hennigan said.
"Gasoline demand is currently 2% to 5% below 2019 levels, with the West Coast lagging 10%. Overall, jet demand remains down nearly 30% below pre-pandemic levels," he added.
Wildfires sweeping the Pacific Northwest, parts of Canada and Northern California have reduced demand, while California's coronavirus infection rates have risen. About 10,000 new cases reported on Aug. 3, according to the New York Times.
Regardless of the impact of the coronavirus, Marathon has succeeded in lowering its refining costs to about USD5/b in 2021 from USD6/b in 2020, said executive vice president and CFO Maryann Mannen on the call. However, that could be changed by the increase in natural gas prices. Used to power refineries, the price of natural gas has risen by about USD1/MMBtu and is anticipated to be a "headwind for the third quarter," she said.
Marathon ran its refineries at 94% utilization in the second quarter, up from the 83% in the first, Mannen said, especially in the Midcontinent where cracks improved 57% from the first quarter.
As MRC informed earlier, in May, 2021, US refiner Marathon Petroleum Corp said its board had approved the conversion of the Martinez refinery in California to a renewable diesel plant. Besides, the company made a final investment decision regarding this project. Martinez, once complete, will be one of the largest renewables facilities in the country.
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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, 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.
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.
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