July exports of diesel hit 10-month low in China as refiners run out of export quotas

July exports of diesel hit 10-month low in China as refiners run out of export quotas

MOSCOW (MRC) -- China's diesel exports in July plunged 41% from a month ago as refiners neared the end of the first batch of 2021 refined fuel export quotas, while a drop-off in domestic fuel supplies encouraged refiners to prioritise local demand, said Hydrocarbonprocessing.

Diesel shipments were 1.39 million tonnes last month, hitting the lowest level since September 2020, data from the General Administration of Customs showed on Wednesday. That was down from 2.36 million tonnes in June but still well above 550,000 tonnes in July last year.

Gasoline exports in July also plunged 49% from a month earlier to only 740,000 tonnes, the lowest point in 14 months. Jet kerosene exports were 660,000 tonnes in July.

China granted 29.5 million tonnes of refined fuel products export quotas in the first batch for 2021. In the first six months, the country sold 26.29 million tonnes of diesel, gasoline and jet kerosene to overseas market.

Meanwhile, Beijing from mid-June imposed hefty taxes on imports of light cycle oil (LCO), mixed aromatics and diluted bitumen, aiming to curb imports it blames for worsening a fuel surplus and polluting the environment.

China's daily crude throughput last month fell to the lowest since May 2020. Last week, China slashed export quotas for refined fuels for the second batch of quotas issued for 2021 by 73% year-on-year to 7.5 million tonnes, pointing to low fuel exports in coming months.

The customs data on Wednesday also showed China's liquefied natural gas (LNG) imports in July were 5.67 million tonnes, up 14% from a year earlier, buoyed by increasing demand from industrial and power generation sectors.

As per MRC, China's daily crude throughput last month fell to the lowest since May 2020 as independent plants slashed production amid a tighter quotas, high inventories and weakening profits. Last month's processing volumes were 59.06 million tonnes, or 13.9 million barrels per day (bpd), 0.9% below the same month of 2020, data from the National Bureau of Statistics (NBS) showed on Monday. That was the first year-on-year decline since March last year when coronavirus hammered Chinese fuel demand, and the July level was down 6% from off June's record at 14.8 million bpd.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

Seven people killed at Shell gas project site in Nigeria

Seven people killed at Shell gas project site in Nigeria

MOSCOW (MRC) -- Gunmen killed a police officer and six employees of a Nigerian oil and gas services contractor during an attack on buses transporting workers to a Shell project site in the southeastern state of Imo, reported Reuters with reference to police's statement.

Attacks on oil and gas facilities have long been a problem in Nigeria, where the multi-billion dollar industry sits alongside impoverished communities that have seen little benefit from it. In this case, the motive was unclear.

The Nigerian arm of Shell, SPDC, confirmed that unknown gunmen had attacked a convoy of buses taking staff of its contractor, Lee Engineering, to its Assa North Gas development project site in the Ohaji area of Imo State on Monday morning.

"We have since shut down the project site while the incident has been reported to the police for investigation. SPDC is working with the contractor and supporting the police through a thorough investigation of the incident and to prevent a recurrence," it said in a statement.

Imo State police spokesman Michael Abattam said efforts were ongoing to arrest the perpetrators.

The company is involved in the installation and construction of a gas primary treatment facility and the supply of a gas turbine generators and a waste heat recovery system, according to its website.

The oil and gas industry, located in the Niger Delta in the south of the country and offshore in the Gulf of Guinea, has been a focal point for violence for several decades. The region has a history of kidnappings, inter-communal conflicts, armed insurgency, piracy and oil smuggling.

As MRC informed earlier, Loadings of Nigeria's key crude grade Forcados are on force majeure due to some operational issues at the export terminal, according to Shell's statement Aug. 16. Force majeure was declared effective Aug. 13 due to "the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy," Shell Petroleum Development Company of Nigeria Ltd. said in a statement.

We remind that Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

BASF raises September polyalcohol prices in Americas

BASF raises September polyalcohol prices in Americas

MOSCOW (MRC) -- BASF, the world's largest petrochemical company, has announced price increases for select polyalcohols in North and South America, as per the company's press release.

The price rise is effective 1 September 2021 or as contracts allow. No reason for the nominated price hike has been given.

Thus, prices for polycaprolactone, epsilon-caprolactone, and 1,6-hexanediol (HDO) flake will grow by USD0.20/pound (lb) in North America and by USD441/metric ton in South America, it says. The price of 1,5-pentanediol will rise by USD0.15/lb in North America and USD331/metric ton in South America, whereas prices for neopentyl glycol (NPG) and 1,6-HDO molten will go up in North America by USD0.10/lb and in South America by USD220/metric ton.

The various products are used in applications including coatings, plastics, epoxy systems, resins for adhesives and sealants, and high-performance polyurethane, according to BASF.

As MRC reported earlier, Lotte Chemical, a major Korean chemical company, has produced polypropylene (PP) required for medical applications using BASF’s Irgastab, a non-discoloring processing stabilizer. With the rollout of COVID-19 vaccinations worldwide, the need for syringes made from PP has increased exponentially.

According to MRC's ScanPlast report, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

China used crude oil stocks again in July despite slower growth in refining volumes

China used crude oil stocks again in July despite slower growth in refining volumes

MOSCOW (MRC) -- China drew on crude oil inventories in July, marking the fourth consecutive month it has processed more crude that what was available from domestic output and imports, said Hydrocarbonprocessing.

The call on inventories was smaller in July than in the previous two months, but this was more a reflection of weak refinery processing rates rather than any underlying boost to demand. China, the world's biggest oil importer, appears to have taken about 223,700 barrels per day (bpd) from reserves in July, according to calculations based on official data.

The country doesn't disclose the volumes of crude flowing into strategic and commercial stockpiles. But an estimate can be made by deducting the total amount of crude available from imports and domestic output from the amount of crude processed. Refiners processed 59.06 million tonnes in July, a 14-month low and down from a record 60.82 million in June, according to data released on Monday by the National Bureau of Statistics.

Domestic output was 16.87 million tonnes, while imports were 41.24 million, giving a total 58.11 million tonnes of crude available to refiners. Subtracting the crude available from the processing volume leaves a deficit of 950,000 tonnes, which is equivalent to about 223,700 bpd, using standard conversion factors.

The small draw in stockpiles in July followed larger calls on inventories of around 980,000 bpd in June, 589,000 bpd in May and 280,000 bpd in April. China has in recent years been rapidly building up its strategic petroleum reserve (SPR) and commercial stockpiles have also grown as new refineries come online and have to build up working inventories.

However, refiners started to draw on stockpiles in October last year, and have called on inventories in six of the last 10 months. China snapped up large volumes of crude when prices plunged to two-decade lows during the coronavirus pandemic, which coincided with a brief price war between top exporters Saudi Arabia and Russia in March last year.

China imported so much crude in the middle part of last year that it resulted in long vessel queues outside ports, and it struggled to offload the cargoes. Refiners appear to have taken the view that crude oil prices have risen too far too fast as the output restrictions by the OPEC+ group of exporters saw benchmark Brent futures surge some 387% from the pandemic and price war low in April last year to a 2021 high of USD77.84 a barrel on July 6.

Since then crude prices have trended lower, with Brent ending at USD69.51 a barrel on Monday as the market starts to retreat from its bullish view amid the reality of weak demand in China, and much of the rest of Asia as the top-importing region continues to battle the coronavirus pandemic. It's not just high prices that are affecting China's crude oil imports and refinery throughput.

Processing rates at smaller, independent refiners were lower in July as they faced tightening quotas and increased taxes on what is known as bitumen blend, which had been a popular feedstock for some independent refiners. The increased official scrutiny of imports and a renewed coronavirus outbreak in China may serve to keep crude imports and refinery processing muted in August.

However, cheaper crude prices and the emergence of discounts on physical cargoes may be enough to tempt some major refiners to purchase more cargoes, although whether they will resume stockpile builds remains an open question.

As per MRC, China's daily crude throughput last month fell to the lowest since May 2020 as independent plants slashed production amid a tighter quotas, high inventories and weakening profits. Last month's processing volumes were 59.06 million tonnes, or 13.9 million barrels per day (bpd), 0.9% below the same month of 2020, data from the National Bureau of Statistics (NBS) showed on Monday. That was the first year-on-year decline since March last year when coronavirus hammered Chinese fuel demand, and the July level was down 6% from off June's record at 14.8 million bpd.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

CTCI Beijing completes Zhangzhou EPC project

CTCI Beijing completes Zhangzhou EPC project

MOSCOW (MRC) -- CTCI Beijing, a CTCI subsidiary company, has completed the first phase of engineering, procurement, and construction (EPC) of a resin plant owned by Zhangzhou CHIMEI Chemical Company in Zhangzhou, China, according to Hydrocarbonprocessing.

Having reached mechanical completion in May and begun commissioning in July, the first phase is slated to produce 450 kilo-tons per annum of acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene (AS).

Commercial operation will begin this September.

TS Zhang, Chairman of CTCI Beijing, says, “This project is another successful cooperation with CHIMEI since 2012. With this project delivered, we helped CHIMEI further consolidate its position in the Chinese market, realizing multiple goals including product line diversification, quality enhancement, and value adding, all so important given its stance as a global leading supplier of ABS. During execution of this project, CTCI Beijing managed to minimize the impact by COVID-19 pandemic and completed the task on time and to quality specifications. At the same time, we have reached a safety record of 6 million man-hours without lost-time injuries. CTCI is committed to delivering follow-up job items fulfilling the brand spirit of being the most reliable engineering services provider.”

The plant’s second phase expansion, which will produce 150 kilo-tons ABS and AS per annum, is now under way and will begin commercial operation in July 2023.

Once the plant comes fully online, it will produce 600 kilo-tons of ABS and AS per annum, becoming a world-leading ABS production base. It will be able to meet the growing ABS demand by local household appliance and motor industries, and will help drive development for up- and downstream businesses.

This is CHIMEI’s second production base in China. The geographical location of the plant at Zhangzhou Gulei Port Economic Development Zone in Fujian Province - one of China’s seven major petrochemical bases - allows quick access to required materials, such as styrene and butadiene, as well as fine utility resources like natural gas, plant air, nitrogen, steam, and wastewater treatment, saving tremendous operation and investment cost.

CTCI has closely worked with CHIMEI in other projects in the past, include ABS, HIPS (high impact polystyrene) and SSBR (solution polymerized styrene-butadiene rubber) EPC projects in Zhenjiang, Jiangsu Province, China. These track records have led to CTCI’s ABS/AS contract award in Zhangzhou.

As MRC reported earlier, in October 2020, Zhangzhou Chi Mei Chemical unveiled plans to build a polystyrene (PS) plant with a capacity of 300,000 mt/year in Zhangzhou (Zhangzhou, Fujian Province, China). The plant will consist of four lines with a capacity of 75,000 mt/year each. It will be located in the Guley petrochemical industry park. The timing of the project is unknown.

CTCI has been providing comprehensive and state-of-the-art engineering services worldwide, and has become a preferred partner for clients across Asia, the Middle East, and the Americas.
MRC