MOSCOW (MRC) -- Oil refiners from Texas to Thailand are bracing for deeper output cuts, bruised by an unprecedented demand shock as more countries lock down and restrict travel to contain the spread of the coronavirus, as per Hydrocarbonprocessing.
In Asia, home to over a third of the global refining capacity, India’s top refiner has slashed output by up to 25%-30% while operators in Japan, South Korea and Thailand - already running at reduced rates - are looking at more cuts even as they shut plants for maintenance.
In Europe, some refineries in Britain and Germany have scaled back production, with traders expecting many others to follow suit as demand for products falters. ExxonMobil’s French subsidiary said on Friday it would adapt production at its two refineries in the country to falling demand.
Several U.S. refineries have also cut back production, including plants in the Los Angeles area, a busy hub for air travel. Fuel demand is starting to sink in the United States, with overall products supplied falling by 2.1 million bpd in the most recent week, a near 10% drop.
Independent refiner Phillips 66 said its first-quarter refinery utilization rate was in the low-to-mid-80s range, with many of their refineries operating near minimum rates.
China, which restarted its economy after weeks of lockdown, is an outlier with its refining sector showing signs of recovery amid a decline in the number of new virus cases.
As MRC informed earlier, the U.S. Environmental Protection Agency will not appeal a court ruling that would sharply reduce its use of waivers exempting refineries from the nation’s biofuels regulation, a big win for the Corn Lobby, according to a Reuters case docket review.
As MRC informed earlier, US Senators Chuck Grassley and Joni Ernst of Iowa have asked the Trump administration not to appeal a court ruling that would slash the use of small refinery biofuel waivers, but have not heard back yet on its decision. President Donald Trump said the United States would take advantage of low oil prices and fill the nation’s emergency crude oil reserve, in a move aimed to help energy producers struggling from the price plunge.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC