MOSCOW (MRC) -- Shortages of oil products have started mounting as strikes at most French refineries entered their fourth week resulting in increased imports of diesel and gasoil, reported S&P Global with reference to sources' statement on Friday.
Gasoil traders noted increased demand for fuel imports in Northwest Europe as a result of the industrial action in France.
"I have seen some French demand for diesel in ARA," one regional fuel trader said, adding he expected the impact of the strikes to be felt later when strategic stocks have to be replenished.
French labor unions, including the CGT, FO and FSU, have called on employees in all sectors to take part in industrial action against the government's pension reforms. The strike, which started December 5, has been extended several times.
As the industrial action has also affected the ports, which have halted operations on multiple days and tug assistance has also been disrupted, imports have been facing difficulties and France has had to use some of its strategic stocks, traders said.
France held 106 days worth net imports in crude and product stocks at the end of September, well above the 90-day requirement of the International Energy Agency.
Deliveries were still intermittent in the Mediterranean. Nonetheless, imports have been rising with traders shifting flows between ports, depending on their status.
Elsewhere, staff at Petroineos' Lavera refinery started halting units last weekend, marking an escalation in the impact from the rolling industrial action.
Staff at Total's Grandpuits refinery has voted to block expeditions of products until Monday which, if extended, could result in the refinery also halting units, according to CGT sources.
Total said the refinery was operating, albeit at reduced rates. Total's Donges refinery is also operating at reduced rates, with expeditions blocked, a union source said. Product deliveries from La Mede biofuels plant have been blocked on and off.
Operations and deliveries have returned to normal at Total's Feyzin and the strike has been suspended at Total's Gonfreville refinery after a fire led to the shutdown of the crude distillation unit mid-December. The refinery was operating partially, using its own stock and imports.
Operations and deliveries were back to normal at ExxonMbil's Fos-sur-Mer, where staff have been joining the strike on and off. There has been no strike action at ExxonMobil's Gravenchon refinery in Normandy.
The French ecology ministry said in a statement Friday, after meeting representatives of the oil industry, that difficulties with product deliveries were affecting only two refineries and said there was good level of product supply. Of the 200 oil terminals, just two have faced temporary difficulties, with the remaining receiving products by pipe, sea or rail, and over 98% of the 11,000 retail stations were receiving normal supplies. 1.7% of the retail stations were having temporary difficulties on December 27, down from 2.6% on December 23, the ministry said.
Several unions have called for a wide-ranging strike and demonstrations on January 9, as well as demonstrations on Saturday, December 28. In addition, the CGT union has submitted a strike notice from January 6 until February 6.
Port and dockworkers have also been asked to stop work for a few hours next Monday, organize protests on January 6-7 at the ports of Dunkirk, Le Havre, Rouen, St Nazaire, La Rochelle, Bordeaux and Marseille, and to halt operations for 24 hours on January 9.
French ports have been working intermittently since the start of the industrial actions, with loadings disrupted on several occasions. As a result, tankers have faced delays at the Fluxel-operated Fos and Lavera oil terminals in the Mediterranean and Le Havre in the north.
As MRC informed before, ExxonMobil's cracker at Notre Dame de Gravenchon, France, had an "unexpected stoppage" on Friday, 6 December, following a technical failure this October. Thus, an electric fire Saturday morning, 19 October, 2019, on the ExxonMobil facilities in Notre-Dame-de-Gravenchon (Seine Maritime) resulted in a plume of smoke, below the regulatory thresholds, which could remain visible for several days.
Besides, ExxonMobil halted polyethylene (PE) production at its site in Notre Dame de Gravenchon, France, at the end of the 2nd week of December 2019, due to commercial reasons, without providing further details. The site houses 500,000 tons/year of linear low density polyethylene (LLDPE) plant, including metallocene linear low density polyethylene (MLLDPE). PE plant resumed production in the 3rd week of December.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
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