MOSCOW (MRC) -- Japan's decision to lift all of the COVID-19 state of emergency and priority measures at the end of September would support the country's ailing gasoline demand in October but market sources remained cautious about the speed of recovery, reported S&P Global.
Japan decided to lift all of its state of emergency on 19 prefectures and its priority measures on eight prefectures on Sept. 30 following a significant drop in new infections. This has been the first time that Japan was not under any of COVID-19 state of emergency and priority measures since early April.
"Japan's crude runs are expected to rise to 2.7 million b/d between November and January, up from 2.3 million b/d in October, as refiners gear up for winter heating demand, and this will be supportive for crude imports over the next few months," said JY Lim, oil markets adviser at S&P Global Analytics.
A source with a Japanese refiner said: "After October, we could see (crude oil) demand increase for transportation use with state of emergency lifted."
Japanese refiners and traders surveyed by S&P Global said Sept. 28 that the companies expect their October gasoline demand will recover from September but some remain cautious about whether the demand will mark a year-on-year increase in the next month.
One Japanese refiner said its October gasoline demand is expected to be flat from a year ago when the country had less impact from the coronavirus pandemic.
Another Japanese refiner was less optimistic about gasoline demand recovery in October when it does not expect its gasoline demand to reach the 2020 level as yet amid rising gasoline prices following the strength in crude oil prices.
As MRC wrote before, Japan has set an ambitious target for renewable energy in the nation's electricity mix by 2030 as it aims to tackle climate change and achieve its 2050 carbon neutral goal.
We remind that Eneos Holdings Inc, Japan's biggest refiner, plans to buy Japan Renewable Energy for about 200 billion yen (USD1.8 billion) from Goldman Sachs and Singaporean sovereign wealth fund GIC. The deal would mark the first major purchase of a renewables company by a top Japanese oil company, the Nikkei said, as Eneos looks to shift away from fossil fuels.
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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.