Singapore's middle distillates dip slightly amid surging exports

Singapore's middle distillates dip slightly amid surging exports

MRC -- Singapore's middle distillates inventories fell marginally week-on-week as net exports of both gasoil and jet fuel/kerosene grew, said Hydrocarbonprocessing.

Gasoil and jet fuel/kerosene inventories at the key oil storage hub were at 10.422 million barrels in the week ended Nov. 22 from 10.423 MMbbl a week earlier, data from Enterprise Singapore showed. Net exports of gasoil posted a week-on-week gain for the first time in two months.

Total gasoil exports rose by more than two times week-on-week. Most of these exports were directed towards other South-East Asian countries, including Malaysia, Myanmar and Indonesia. On the other hand, total gasoil imports fell 16.8% week-on-week.

Singapore was also a net exporter of jet fuel/kerosene and net exports posted week-on-week gains after two consecutive weeks of declines. Both imports and exports grew by a substantial amount. Total jet fuel/kerosene imports grew by more than 300 times week-on-week, primarily driven by imports from Malaysia.

Total jet fuel/kerosene exports expanded over sevenfold week-on-week, with the top destination being Australia.

We remind, China's oil demand growth is likely to ease in the first half of 2024 to around 4%, according to consultancies, with resurgent consumption from the aviation and petrochemical sectors offset by weaker diesel usage due to an ongoing property sector crunch. Slowing demand growth for the world's biggest oil importer comes amid what remains an uncertain outlook for the Chinese economy and as travel patterns normalise following the post-COVID rebound earlier in the year.

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Scotland's Grangemouth refinery faces closure

Scotland's Grangemouth refinery faces closure

MRC -- PetroIneos is preparing to shut down its Grangemouth oil refinery in Scotland to convert it into a fuels import terminal as it faces growing international competition, said Hydrocarbonprocessing.

The 150,000'bpd refinery, Scotland's only oil refinery and one of six in Britain, is expected to continue operating until spring 2025, PetroIneos said in a statement. Although it is a major supplier of fuels, such as gasoline, diesel and aviation fuel to Scotland, the plant has faced significant challenges due to growing global competition, particularly from newly-built refineries in Asia and the Middle East.

PetroIneos will soon start preparatory work to enable the future transformation of its Grangemouth refinery into a fuels import terminal, it said in a statement. The timescale for the shutdown is yet to be determined exactly but the preparatory work is expected to take around 18 months, with the refinery expected to continue operating until spring 2025.

"As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce," Franck Demay, CEO at PetroIneos Refining, said. The plan includes converting the site of the refinery into a fuels import hub.

onverting refineries into storage terminals is often far cheaper than a full shutdown as the operator is not required to fully restore the land to its former state. The company will also seek to convert its existing export terminal at Finnart, which is linked to Grangemouth by cross-country pipelines, into a diesel import facility.

PetroIneos said it is also evaluating a range of low-carbon opportunities for Grangemouth, including the feasibility of a bio-refinery facility on the site. PetroIneos is a 50-50 joint venture between petrochemicals giant Ineos and PetroChina. It also owns the Lavera refinery in southern France.

We remind, China's oil demand growth is likely to ease in the first half of 2024 to around 4%, according to consultancies, with resurgent consumption from the aviation and petrochemical sectors offset by weaker diesel usage due to an ongoing property sector crunch. Slowing demand growth for the world's biggest oil importer comes amid what remains an uncertain outlook for the Chinese economy and as travel patterns normalise following the post-COVID rebound earlier in the year.

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China oil demand growth poised to slow to around 4% in H1 2024

China oil demand growth poised to slow to around 4% in H1 2024

MRC -- China's oil demand growth is likely to ease in the first half of 2024 to around 4%, according to consultancies, with resurgent consumption from the aviation and petrochemical sectors offset by weaker diesel usage due to an ongoing property sector crunch, said Hydrocarbonprocessing.

Slowing demand growth for the world's biggest oil importer comes amid what remains an uncertain outlook for the Chinese economy and as travel patterns normalise following the post-COVID rebound earlier in the year.

The Organization of Petroleum Exporting Countries foresees Chinese demand averaging 16.41 million barrels per day (bpd) in the first half of 2024, up 3.2% on 2023 levels, while the International Energy Agency (IEA) forecasts demand averaging 17.1 million bpd for the full year, to show 3.9% growth.

Even though China's economy has made a faltering recovery this year, oil consumption was still on course to set record highs, having been subdued between 2020-2022 by strict COVID curbs. OPEC and the IEA expect China's oil demand to show growth in 2023 of 7.6% and 12.1%, respectively.

OPEC has dismissed fears of that demand growth for oil in China is fading, describing negative sentiment as "overblown" in a recent report. OPEC's forecasts show China accounting for 24.6% of global oil demand growth in the first half of 2024, according to Reuters calculations.

The OPEC+ group, which includes allies such as Russia, on Wednesday unexpectedly delayed an upcoming ministerial meeting expected to discuss output cuts as producers struggled to agree on production levels, sources said. Consultancies Wood Mackenzie, Rystad Energy and Energy Aspects respectively forecast China's first-half 2024 oil demand to grow by 3.7%, 4.0% and 4.4% versus the same period in 2023.

Their growth forecasts for the first six months range from about 578,000 bpd to 700,000 bpd to total between 16.2 million and 16.82 million bpd. China does not provide official data on oil consumption or inventory levels, and the private growth forecasts use different bases of comparison.

The forecasts put expected growth next year marginally below pre-pandemic rates, when China's oil demand grew at an average of 4.5% between 2016 and 2019, according to Reuters calculations using IEA data for full year growth.

We remind, the European Parliament voted on Wednesday in favour of a new law aimed at reducing packaging waste and boosting recycling across the EU. The legislation was overseen by Belgian MEP Frederique Ries (MR/Renew) and passed with 426 votes in favour, 125 against, and 74 abstentions.

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BASF signs CNY 40 billion syndicated bank term loan facility with maturity of 15 years for its Verbund site in Zhanjiang, China

BASF signs CNY 40 billion syndicated bank term loan facility with maturity of 15 years for its Verbund site in Zhanjiang, China

MRC -- BASF is taking advantage of the currently low interest rate environment in China and has signed a CNY 40 billion (approximately €5 billion) syndicated bank term loan facility with a maturity of 15 years for its new Verbund site in Zhanjiang, said the company.

The new site is currently under construction in Guangdong province. The loan will be provided by major Chinese banks and offers flexible repayment options to optimize BASF’s cash utilization.

BASF is financing the new Verbund site with a combination of around 20 percent equity and 80 percent debt. “By signing this bank term loan facility, BASF is implementing its strategy to finance the Zhanjiang project with funds from China,” said Dr. Dirk Elvermann, Chief Financial Officer of BASF SE. The company’s financial strength and proven track record of strong sales and earnings growth in China enabled BASF to obtain highly attractive financing conditions for the loan.

“We are impressed by the great support for the project from the local banking market,” said Christian Jutzi, President Corporate Finance. “This underscores that our banking partners’ are confident that our new Verbund site will become a key platform for the long-term profitable and sustainable growth.”

We remind, BASF, a globally leading battery materials producer, and SK On, a globally leading electric vehicle battery cell manufacturer, have entered into an agreement to jointly evaluate collaboration opportunities in the global lithium-ion battery market focused on North America and Asia-Pacific. The collaboration brings together strong business and product development capabilities to develop industry-leading battery materials for lithium-ion batteries.

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Covestro assists China’s Xinquan Automotive in going global

Covestro assists China’s Xinquan Automotive in going global

MRC -- German materials manufacturer Covestro has forged a global partnership with Chinese automotive trim company Xinquan Automotive at the China International Import Expo in Shanghai, said the company.

This alliance seeks to strengthen the China business and enhance international collaboration, supporting Xinquan’s expansion into North America, Europe, and ASEAN countries. The Chinese company is dedicated to innovation, aiming to establish itself as a global player in the automotive industry. Partnering with Covestro provides Xinquan access to Covestro’s wealth of expertise and extensive global network. This partnership is focused on pioneering technologies and sustainable solutions that align with the dynamic requirements of the global automotive market.

Covestro excels in offering a diverse array of solutions for the automotive industry. Polyurethane, invented by Otto Bayer at Covestro’s predecessor company Bayer, is the vital material for automotive interiors. Polyurethane-based automotive interior applications, such as instrument panels, door panels, and center armrests, offer a soft, tactile feel, enhancing the comfort of both drivers and passengers. Polyurethane materials are known for their lightweight properties, minimal odor, and low levels of volatile organic compounds. These attributes create a comfortable and environmentally compatible interior environment, answering key demands of the automotive industry.

We remind, Covestro is expanding its production capacities for thermoplastic polyurethane (TPU) Films in the Platilon® range, as well as the associated infrastructure and logistics. To this end, the company is investing a low double-digit million euro amount in its German center of excellence for the aforementioned films in Bomlitz, Lower Saxony.

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