European oil refining margins turn negative, fall to six-year low

MOSCOW (MRC) -- Northwest European oil refining margins turned negative, falling to around - USD0.49 a barrel, Reuters calculations showed.

Margins fell to their lowest since October 2013.

A sharp fall in gasoline and fuel oil margins in recent days precipitated the fall, with a relative strength in middle distillates failing to keep overall margins in positive territory, traders said.

"The return of refineries from maintenance has seriously reduced refinery economics, and this is not a sign of strong global oil product demand," consultancy Petromatrix said in a note on Tuesday.

Traders and analysts were expecting that refiners, particularly simple ones that don’t have equipment to upgrade fuel oil into more valuable products, would have to cut runs.

Gunvor Group on Monday said it had shut one of its two crude distillation units at its Rotterdam oil refinery in the Netherlands as it was uneconomical to run.

The unit will be down into next March when the 88,000 barrel-per-day refinery will undergo maintenance.

"The current price evolution indicates that there is not enough demand for the current output of oil products," Petromatrix said.

Even margins for complex refineries have turned negative in recent days, traders said, with crude grades such as Russia’s Urals becoming uneconomic to process.
MRC

Indorama Ventures completes acquisition of Sinterama

MOSCOW (MRC) -- Indorama Ventures Public Company Limited (IVL), a global chemical producer, has successfully completed the acquisition of Sinterama S.p.A, a leading manufacturer of polyester automotive interiors and high performance coloured yarns manufacturer, the company announced.

This acquisition elevates IVL’s capacity to deliver comprehensive and innovative solutions in highly specialised applications including coloured polyester yarns for the automotive, furnishing, apparel and technical applications.

The combination of IVL's existing manufacturing capabilities and supply chain with Sinterama's industry-leading portfolio gives IVL added momentum to serve the increasing demand for automotive and home applications.Sinterama has approximately 890 employees working at five production sites in four countries in Italy, Brazil, China and Bulgaria, which is a new market for IVL.

Sinterama holds leading positions in highly specialised applications in Europe, with an excellent reputation and proven technology. Its expertise and network of strategically located facilities will be integrated into IVL’s existing specialities business, thereby creating the industry partner of choice for high-value polyester yarns.

As MRC wrote before, in June 2018, Indorama Ventures Public Company Limited (IVL), a global chemical producer, entered into a joint venture agreement with Dhunseri Petrochem Ltd. (Dhunseri) to acquire its Egyptian Indian Polyester Company S.A.E. (EIPET) PET facility located in Ain Sokhna free trade zone, North West of the Gulf of Suez in Egypt. This plant has a manufacturing capacity of 540,000 tonnes per annum.

As per MRC's DataScope, imports of injection moulding PET chips in Russia increased by 14% in the first ten months of the year compared with the same period a year ago and reached 106,000 tonnes. The same indicator in January-October 2019 amounted to 92,700 tonnes. The share of bottle grade PET imports from China amounted to 90% compared to 86% for the same period last year.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia, Europe and Americas. The company’s portfolio comprises Integrated PET, Olefins, Fibers, Packaging and Specialty Chemicals. Indorama Ventures products serve major FMCG and Automotive sectors, i.e. Beverages, Hygiene, Personal Care, Tire and Safety segments. Indorama Ventures has approx. 20,000 employees worldwide and consolidated revenue of USD 10.7 billion in 2018.
MRC

ExxonMobil profit halves on weak oil prices, chemicals margins

MOSCOW (MRC) -- Exxon Mobil Corp's third-quarter profit nearly halved, hit by lower oil prices and weaker margins in refining and chemicals, with its three major business reporting lower year-over-year profit, reported Reuters.

Earnings fell to USD3.17 billion, or 75 cents per share, in the quarter, from USD6.24 billion, or USD1.46 per share, a year earlier, the company reported.

It beat analysts' recently reduced expectations for earnings of 67 cents per share. The company last month warned results would be hurt by weaker chemicals and lower oil prices, prompting analysts to reduce estimates from 86 cents per share.

"Maybe expectations were a little bit weak going in, but I think overall it is probably slightly negative relative to expectation," said Anish Kapadia, director of energy at London-based Palissy Advisors.

Exxon's results mirrored weaker earnings at rivals BP Plc and Royal Dutch Shell, which earlier this week indicated they might delay dividend increases or a buyback program because of low prices. Chevron Corp on Friday reported a 36% drop in third-quarter profit. Prices have fallen for oil and gas as US shale producers keep pumping more oil amid slowing global consumption growth.

Exxon has been investing in major projects to boost production at a time when investors have been pressing oil companies to cut spending and increase returns to shareholders. It spent USD7.7 billion in the third quarter, up from USD6.6 billion the same period the year prior and higher than what analysts expected.

Exxon's cash flow, a closely watched metric by investors, fell 24% from a year ago. Investors have been looking for the company to improve cash flow to cover its dividends and capital expenses.

Despite rising output from US shale, profits in Exxon's oil and gas production unit were down 49% to USD2.17 billion on weaker prices, its lowest earnings in two years.

Its refining business earned USD1.23 billion, down 25% from last year, on lower margins for its gasoline and diesel.

Its chemicals business was down 66% year-over-year. Results have been weaker because of global overcapacity in plastics and higher project expenses.

Exxon's oil equivalent production rose about 3% to 3.89 million barrels per day, the fourth quarter in a row of year-over year gains.

Its production in the Permian Basin, the top U.S. shale field, rose 7% from the second quarter to around 293,000 barrels of oil equivalent daily.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant (UK), which has a capacity of more than 800,000 t/y.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

PBF Energy Inc. is a petroleum refiner and supplier of unbranded transportation fuels, heating oils, lubricants, petrochemical feedstocks, and other petroleum products. Headquartered in Parsippany, New Jersey, the company's refineries include facilities in Chalmette, Louisiana, Toledo, Ohio, Port of Paulsboro in Gibbstown, New Jersey, the Delaware City Refinery in Delaware City, and the former ExxonMobil refinery in Torrance, California. PBF produces a range of products including gasoline, ultra-low-sulfur diesel (ULSD), heating oil, jet fuel, lubricants, petrochemicals and asphalt
MRC

Fire causes extensive damage at Pennsylvania recycler

MOSCOW (MRC) -- A fire broke out at Palmer Plastics Inc's plastics recycling plant in Palmer Township, PA, US. No injuries were recorded, as per Plasticsnews.

The fire originated from the plastics extruder that spread up through the extruder's exhaust system into the plant's roof assembly. The fire was originally in a machine that breaks down plastic into smaller plastic pellets. But by the time firefighters were able to extinguish the flames in the machine, the fire had crept up to the warehouse roof.

No one was injured at the warehouse, a plastic recycling facility, and William Penn Highway was shut down until about 9:40 p.m.

As MRC informed earlier, four people have been killed and three seriously injured in a fire at an oil and gas processing plant on the outskirts of Mumbai run by India’s Oil and Natural Gas Corp. The Uran plant processes nearly half of the crude oil that ONGC sells to refineries and 12% of its natural gas sales. The plant is also a major supplier of cooking gas.
MRC

Ukraine increased import of injection moulding PET chips from Lithuania by 29% in January-October

MOSCOW (MRC) - Imports of injection moulding PET chips from Lithuania by Neo Group grew by 29% in ten months of this year and amounted to 36,600 tonnes, according to MRC DataScope report.

This figure was 28,400 tonnes in January-October 2018.

October imports of PET from Lithuania to Ukraine doubled compared to the same period last year and amounted to 5,200 tonnes against 2,200 tonnes, while the maximum volume of imports this year fell in September and amounted to 7,000 tonnes.

The total volume of Lithuanian PET imports to the country increased to 29% in January-October 2019 against 22% in January-October last year.

The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.

Nevertheless, despite an increase in the consumption of Lithuanian material, the total import supplies of injection moulding PET chips in October decreased by 16% compared to the same period last year and by 6% compared to September of the current year.


MRC