China sets deadline for refiners to apply for oil import permits

MOSCOW (MRC) -- China's top state planner will stop accepting new applications from oil refiners to use imported crude oil from May 5, it said on Thursday, amid growing concerns about domestic refining overcapacity that has led to record exports of fuel, reported Reuters.

China has allowed 22 independent refiners to import crude oil since 2015 with quotas totaling 81.93 MMt, or 1.64 MMbpd, making up 12% of the country's total crude oil imports, according to China Petroleum and Chemical Industry Federation (CPCIF).

Harry Liu, oil analyst with consultancy IHS Markit, said the planner may have set a target of allowing in a total of 2 MMbpd quotas to independents, a level expected to be met with those that have already applied before the May 5 deadline.

"The policy, which is quite expected, also sends the signal that the government is not going to encourage independent firms to add new crude processing capacities," said Liu.

The National Development and Reform Commission (NDRC) did not say in the statement whether it was referring to state-owned or independent refiners, unsettling an already jittery industry after a series of trade policy changes from Beijing in recent months.

The limits, however, do not apply to large state refiners like PetroChina or Sinopec as they typically do not need quotas to import crude oil.

"NDRC is pretty cautious in giving more import quotas because they are concerned about the fuel glut in the domestic market," said a manager at an independent refiner in the city of Zibo in Shandong province. The majority of the independent refiners operate in Shandong on China's east coast.

He reckons he will not be affected by the deadline as he has filed for an import permit, but it could trigger a flurry of applications over the coming week.

In a report published on Wednesday on the industry federation's website, CPCIF warned of worsening overcapacity in the refining industry which has led to net fuel exports expanding at 40-50 percent per annum over the past few years.

The surplus capacity is expected to rise to 110 MMt, or 2.2 MMbpd, by 2020 under a base scenario, and net fuel exports to top 50 MMt, or 15% of the total fuel produced, resulting in China overtaking South Korea and India as Asia's largest fuel exporter, said the association.

As MRC wrote previously, China's Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels. Sinopec's upgrades come as China, the world's second-biggest oil consumer, is embracing more stringent fuel standards in its battle against pollution and suffering an overall glut in refining capacity. After the upgrades, the total refining capacity of the four refining sites will reach 130 MMtpy, or 2.6 MMbpd, while ethylene capacity will reach 9 MMtpy.
MRC

MOSCOW (MRC) -- Haldia Petrochemicals Ltd (HPL) is in plans to brought on-stream its high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant at the petrochemical complex located in the eastern Indian state of West Bengal, as per Apic-online.

A Polymerupdate source in India informed that the plant is likely to be restarted in a day or two following an unplanned outage. The company has encountered technical glitch at the LLDPE line of the swing plant in end-February 2017.

Located at Haldia in the eastern Indian state of west Bengal, the complex can produce 700,000 mt/year of ethylene and 350,000 mt/year of propylene and provides feedstock to a 330,000 mt/year high density PE plant, a 370,000 mt/year HDPE/linear low PE swing plant and a 350,000 mt/year polypropylene unit.

As MRC informed before, in October 2016, HPL reported a massive fire at the petrochemical complex located in the eastern Indian state of West Bengal.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are polyethylene (PE) and polypropylene (PP).
MRC

MOSCOW (MRC) -- Bayer, the German chemicals and pharmaceuticals conglomerate, had what it described as a "very successful start" to 2017, solidly beating analysts expectations for its first quarter with growth across all sectors of its business, said The Financial Times.

It posted first quarter sales of EUR13.24bn, up 9.4 per cent compared to last year on a constant currency basis, and earnings before interest, tax and depreciation and special items of EUR3.89bn, up 14.9 per cent. Analysts had expected sales of EUR12.6bn and ebitda before special items of EUR3.5bn.

Net income increased by almost 40 per cent to EUR2.1bn. Performance was driven by "very good business development" at its pharmaceuticals unit, and "significant increases in sales and earnings" at Covestro, its former materials science division which now has a separate stock exchange listing. Bayer sold down its stake in Covestro last month from 64 per cent to 53 per cent.

Pharmaceuticals have been a consistent driver of results at the company in recent quarters, raising concerns as the unit is due to become a smaller part of the business once the group completes its acquisition of Monsanto, the seed and crop giant, later this year.

The group credited the performance at Covestro, which remains significantly smaller than its pharmaceuticals, consumer health and crop sciences divisions, as it raised its outlook for 2017.

Bayer said it now expects sales for the year of EUR51bn rather than EUR49bn and ebitda before special items to grow by a "low teens percentage" rather than a "mid-single digit percentage".

MRC

MOSCOW (MRC) -- Siam Cement Group (SCG), Thai industrial conglomerate, is setting its sights on developing a petrochemical complex in Indonesia, by conducting a feasibility study on project with potential partner PT Chandra Asri Petrochemical Tbk (CAP), reported Plastemart.

The feasibility study for the petrochemical complex is expected to be completed in 2018.

As per Bangkokpost.com, the two companies have been traditional partners for years, as SCG has owned a 30.6% stake in CAP since 2011. That, in turn, has encouraged the two firms to join together in developing a petrochemical complex in Indonesia.

"CAP wants to expand its second petrochemical plant as well as develop a new petrochemical complex in Indonesia, so it has invited us to join the project, since we have been a good partner for many years," President and chief executive Mr Roongrote said.

As MRC informed earlier, SCG Chemicals' subsidiary plans to invest in a new grade of high value added (HVA) polyethylene (PE), with commercial production beginning by the end of the year.

SCG Chemicals is a subsidiary of SCG and is one of SCG’s 3 core businesses consisting of Chemicals, Paper and Cement-Building Materials. SCG embarked upon the chemicals business in 1989. At present, SCG Chemicals manufactures and supplies a full range of petrochemical products ranging from upstream petrochemicals such as Olefins, intermediate petrochemicals such as Styrene Monomer, PTA, and MMA, to downstream petrochemicals such as Polyethylene, Polypropylene, Polyvinyl Chloride, and Polystyrene resins. SCG Chemicals is now one of the largest integrated petrochemical companies in Thailand and a key industry leader in the Asia-Pacific region.
MRC

According to the National Bureau of Statistics of Belarus, February 2017 PE imports to Belarus increased to 11,500 tonnes from 8,500 tonnes a month earlier. Local companies raised their import purchasing of LLDPE in the Middle East and of LDPE in Russia. Overall PE imports reached 20,000 tonnes in January-February 2017, compared to 13,400 tonnes a year earlier. Imports of all PE grades rose, with LLDPE and LDPE accounting for the greatest increase.

The structure of PE imports to Belarus by grades looked the following way over the stated period.

February total LDPE imports grew to 3,200 tonnes from 1,900 tonnes a month earlier. Local companies increased their PE purchasing in Russia and Azerbaijan. Overall imports of this PE grade into Belarus totalled 5,100 tonnes in the first two months of 2017, compared to 2,600 tonnes a year earlier. An accident at the local producer's ethylene unit and, as a result, a major fall in capacity utilisation at LDPE production in the second half of the year was the main reason for such a great increase in imports.

February LLDPE imports were 4,900 tonnes versus 3,700 tonnes a month earlier. Thus, overall LLDPE imports to Belarus exceeded 8,600 tonnes in January-February 2017, whereas this figure was 5,500 tonnes a year earlier. Market participants said the bulk of LLDPE was redirected further to Russia.

February imports of high density polyethylene (HDPE) grew to 3,500 tonnes from 2,900 tonnes a month earlier. Local companies decreased their purchasing of film grade PE in Uzbekistan and of pipe grade PE in Europe. Thus, HDPE imports totalled 6,400 tonnes in the first two months of 2017, up by 20% year on year.

MRC