Chinese refiners boost diesel output to profit from robust export margins

Chinese refiners boost diesel output to profit from robust export margins

MOSCOW (MRC) -- China's refined oil product exports in November are set to hit the highest since April 2020 as refiners ramp up output to multi-month highs to boost diesel supply and profit, offsetting the impact of slower domestic demand from COVID-19 restrictions, said Reuters.

The world's top two refiners - the United States and China - are processing more crude to meet higher diesel use globally this winter as countries switch to oil for heating, away from more expensive natural gas. The increased output could also cool prices for other oil products, especially for gasoline, and dampen overall refining margins.

China's crude oil throughput could rise by up to 500,000 barrels per day (bpd), or 4% this month over October, as two new refineries - PetroChina Guangdong Petrochemical and private firm Shenghong Petrochemical - prepare to start operations, three Beijing-based industry sources told Reuters.

Half of the increase, though, will still come from Asia's biggest refiner Sinopec (600028.SS), one of them said, as it raises output to produce more diesel and raise fuel exports. "Crude runs are estimated to increase to around 14.4 MMbpd in November," said senior analyst Daphne Ho at consultancy Wood Mackenzie.

That compares with around 13.8 MMbpd of throughput in September. Official output data for October will be released on Nov. 15.

Sinopec's major coastal plants are expected to raise throughput moderately or extend high operation rates from October, with production geared towards diesel at the expense of gasoline, company sources told Reuters.

"Gasoline demand is not good but diesel inventories are thin. So the mandate from the headquarters is to boost diesel production to supply the domestic market and also to raise exports," one of the Sinopec sources said.

A Sinopec spokesperson declined to comment.

Further boosting supply, China's largest private refiner Zhejiang Petroleum and Chemical Co (ZPC) is raising diesel output by cutting petrochemical production.

We remind, China produced a record volume of gasoil in September as refiners ramped up production ahead of winter and sought to capitalise on high export prices. Output reached just over 17 million tonnes, up 26 per cent from August, noted China’s National Bureau of Statistics on Wednesday. Domestic demand is set to rise with winter approaching, but there are export dollars to be earned as well with refining margins rising to around USD40 a barrel in Asia, according to Refinitiv, a unit of the London Stock Exchange Group.

LANXESS Q3 net income increased 8.1%

LANXESS Q3 net income increased 8.1%

MOSCOW (MRC) -- LANXESS' third-quarter net income rose by 8% year on year in the third quarter amid significant sales increase in all segments on the back of higher prices, said the company.

Sales increased by a significant 38.2 percent from EUR 1.581 billion in the prior-year quarter to EUR 2.185 billion. EBITDA pre exceptionals reached EUR 240 million, growing by 4.8 percent compared to the previous year’s figure of EUR 229 million.- Sales volumes fell in the third quarter, particularly due to weakening demand.

All business segments continued to record significantly higher raw material and energy prices, which were mainly passed on to the market through increase in selling prices.

"Massively increased raw material and energy costs, declining general demand in response to the drastic increase in inflation, central banks’ interest rate hikes to counter this inflation, and continuing disruptions to global logistics and supply chains are tarnishing the outlook for the world economy," the company said in a statement.

The company expects EBITDA pre exceptionals from continuing operations at between EUR900m and EUR950m in 2022.

"Compared with earnings of EUR815m in 2021, we therefore continue to expect EBITDA pre exceptionals to be significantly higher than the earnings of the previous year," it added.

We remind, on 31st May 2022, Advent and LANXESS announced the joint, Advent controlled, acquisition of DSM Engineering Materials, alongside its combination with LANXESS High-Performance Materials (subject to competition clearance), to establish a leading global engineering materials company with sales of around EUR 3 bn.

LANXESS is a leading specialty chemicals company with sales of EUR 6.1 billion in 2021. The company currently has about 13,200 employees in 33 countries. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives and consumer protection products.

Covestro decides to exit formulated polyether polyols business for the appliance industry in China, India and ASEAN

Covestro decides to exit formulated polyether polyols business for the appliance industry in China, India and ASEAN

MOSCOW (MRC) -- Covestro has announced a portfolio adjustment to its Tailored Urethanes business for the appliance industry in Asia Pacific excluding Japan in response to the evolving customer behavior in the region, said the company.

Polyurethane is an important thermal insulation material for refrigerators and cooling devices. Covestro is currently providing customers in the appliance industry with two-component polyurethane as a system solution that combines formulated polyether polyols (PET) and isocyanates (MDI).

Recent market analysis shows that most regional appliance customers now tend to buy the two components PET and MDI separately. Based on the changing needs of the appliance industry, the company has decided to exit the PET portion of the business in Asia Pacific (except Japan) by the end of 2022. The company’s approach towards appliance industry in Asia Pacific will not affect the business in Europe and North America.

The appliance industry will continue to remain a key segment for Covestro’s business in Asia Pacific. Following the portfolio optimization, Covestro, as a reliable supplier, will continue to sell the MDI component to the appliance industry in China, India and ASEAN.

Globally, Covestro continues to stay committed to other customer segments in polyurethanes with its system solution approach. In Asia Pacific specifically, Covestro will continue to focus on customer needs in the polyurethane system applications in automobiles, wind blades, pultrusion and reefer containers where tailored solutions and system supply are still valued by customers.

We remind, Covestro AG (Leverkusen, Germany) broke ground in Antwerp, Belgium for a new world-scale production facility for the manufacture of aniline. With the Covestro breaks ground in Antwerp for new aniline plant.

Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, cosmetics and health, as well as in the chemical industry itself.

Fire breaks out at Chevron's El Segundo, California refinery

Fire breaks out at Chevron's El Segundo, California refinery

MOSCOW (MRC) -- Chevron said fire crews responded to an isolated fire inside its 269,000-barrel-per-day El Segundo refinery in California on Tuesday, with no injuries due to the incident, said Reuters.

The time of dispatch was 6:13 p.m. (0213 GMT) with a response at the two-alarm level from El Segundo, Manhattan Beach, Redondo Beach and Los Angeles County fire departments, El Segundo fire chief Deena Lee said.

It was unclear whether the material involved was jet fuel or diesel, Lee said.

Local media reports said the fire had occurred in a particular section of the refinery. The Los Angeles Times reported on its website that the blaze had been extinguished around 8:35 p.m. (0435 GMT).

A company spokesperson declined comment on which refinery units were involved.

The El Segundo refinery supplies 20% of all motor vehicle fuels and 40% of the jet fuel consumed in southern California, according to Chevron's website.

We remind, Chevron reported its second-highest ever quarterly profit, blasting past analysts' estimates, driven by soaring global demand for its oil and gas and rising production from its U.S. oilfields. The surge comes as oil companies book mounting profits with prices near record levels and supplies tight on output cuts during the COVID-19 pandemic, as well as market disruption from the war in Ukraine. Chevron posted a third-quarter net profit of USD11.2 B, or USD5.78 per share - almost double the $6.1 B from the same period last year, and well ahead of Wall Street's USD4.86 estimate.

PTTGC swings to Q3 net loss amid weaker petchem margins

PTTGC swings to Q3 net loss amid weaker petchem margins

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) swung to a net loss of Thai baht (Bt) 13.4bn in the third quarter amid weaker petrochemical spreads, said the company.

Group adjusted EBITDA margin fell to 6% in the third quarter of this year from 14% in the same period of 2021.

Adjusted EBITDA at the intermediates business fell by 87% year on year in the third quarter, weighed by weaker sales volumes due to planned maintenance at the company’s bisphenol A (BPA) plant.

The phenol, monoethylene glycol (MEG), and purified terephthalic acid (PTA) markets were weighed by poor downstream demand, especially the textile, construction and electronic industries in China during the third quarter.

For the polymers and chemicals business, third-quarter adjusted EBITDA fell by 4% year on year amid lower sales volumes.

As per MRC, PTT Global Chemical America announced plans to build a new plastics recycling facility in central Ohio.

PTTGCA, the company that has proposed construction of an ethane cracker plant in Belmont County, and the Solid Waste Authority of Central Ohio signed a non-binding memorandum of understanding to locate a new recycling complex on SWACO property.