India to continue prompt fuel exports for at least two more weeks

MOSCOW (MRC) -- Indian refiners are likely to continue prompt export of refined fuels for at least another two weeks to avoid a complete shutdown after the coronavirus lockdown hit local demand, reported Reuters with reference to company officials' statement.

A three-week lockdown due to end in mid-April slashed state fuel retailers’ local diesel sales by about 26% and petrol by about 17% in March, provisional data shows.

Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp control about 90% of fuel pumps in India, where falling fuel consumption has deepened crude refining cuts by state refiners.

Some have declared force majeure on crude purchases as storage facilities are full.

India’s fuel consumption is expected to recover over the next 10-15 days as recent steps by the government, including movement of trucks to carry non-essential items will push up demand, R. Ramachandran, head of refineries at BPCL, said.

BPCL’s average crude processing has declined to 60%, from 90% reported on March 24, he said, adding:

"In order to operate the refineries above the turndown levels and to balance the refinery runs and the inventory build up, it is essential for us to look at selective exports."

Indian state refiners rarely export gasoil and HPCL and Mangalore Refinery and Petrochemicals Ltd sporadically export gasoline.

In a rare move, the country’s top refiner IOC recently issued tenders to export more than 50,000 tonnes of gasoline and some reformate for April loading.

"It will be difficult to operate in this situation for too long ... we may have to shut one or two refineries if demand doesn’t recover," said Sanjiv Singh, chairman of Indian Oil Corp . Another company official said IOC’s 11 refineries are operating at about 50% capacity, compared to 70%-75% previously reported.

"It is better to shut the plant than operating below 30%-35% capacity ... refinery is a critical plant," the source, who did not wish to be identified, told Reuters.

Private refiner Nayara Energy, part-owned by Russian oil giant Rosneft, which usually exports naphtha and gasoline, has also offered reformate for April lifting.

MRPL has issued tenders to export 130,000 tonnes diesel and 25,000 tonnes of gasoline in April.

"India’s April gasoil exports have accumulated to 900,000 tonnes, excluding the exports from Reliance. So, with those of Reliance combined, we expect April exports will be at a record high," an Asian trader said.

MRPL has reduced its crude refining to 50% from a previously reported cut of 33%, its managing director M. Venkatesh said.

"We are trying our best not to export prompt cargoes, but for the next one to two weeks it will be like this," he added.

As MRC informed previously, Indian Oil Corp restarted operation at its naphtha cracker in India in early-October, 2019. The cracker was shut in early-September, 2019 for a maintenance turnaround. Located in Panipat, in the northern Indian state of Haryana, the cracker has an ethylene production capacity of 857,000 mt/year and propylene capacity of 425,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Nizhnekamskneftekhim (part of TAIF group) has reduced its April selling polystyrene (PS) prices by Rb10,000/tonne, according to the ICIS-MRC Price report.

Thus, general purpose polystyrene (GPPS) for injection moulding and extrusion was offered at Rb76,000-80,000/tonne, whereas high impact polystyrene (HIPS) - at Rb80,000-84,000/tonne CPT Moscow, including VAT.

Traders reduced their prices of material by Rb12,000/tonne for some customers, and prices came close to the lower price range. A major trader offered GPPS at Rb76,500-77,500/tonne CPT Moscow, including VAT, and HIPS - at Rb80,500-81,500/tonne CPT Moscow, including VAT.

Demand has been subsiding rapidly in the construction segment of the Russian PS market. Buyers reduced their orders for April purchasing of material from some traders by half. A number of small- and medium-sized converters were forced to temporarily suspend production because of the tightening of the quarantine conditions. Demand for finished products remained strong in the food packaging segment.

PJSC "Nizhnekamskneftekhim" (NKNKh) is one of the largest Russian manufacturers of petrochemical products. The industrial complex of the company includes ten major production plants and ten departments (Railway Transport, Ethylene pipelines, etc..). NKNKh produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is a member of TAIF Group.
MRC

MOSCOW (Market Report) -- Penoplex, Russia's largest producer of foaming polystyrene (PS), has reduced its April selling prices of general purpose polystyrene (GPPS) for the Russian market by Rb10,000/tonne from the previous month, according to ICIS-MRC Price report.

Demand for the Kirishi plant's material remained quite good.

Demand has been subsiding rapidly in the construction segment of the Russian PS market. Buyers reduced their orders for April purchasing of material from some traders by half. A number of small- and medium-sized converters were forced to temporarily suspend production because of the tightening of the quarantine conditions.

Penoplex is a large Russian producer of polymer-based building and decorative materials. The company began its activity in 1998 with the launch of Russia's first line for the production of heat-insulating materials from extruded polystyrene foam under the PENOPLEX trademark. The company has eight production sites, seven of which are located in Russia and one - in the Republic of Kazakhstan (Almaty region), with a total production capacity of 4 million cubic metres.
MRC

MOSCOW (MRC) -- Amid more than a double fall in oil prices, Middle Eastern producers were forced to make an equally great reduction in export polypropylene (PP) prices for April shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over April prices of Middle Eastern PP began in the middle of last week. All market participants said Middle Eastern PP suppliers significantly reduced their export prices of propylene polymers for this month's shipments, in most cases, the price reduction was USD90-100/tonne.

Deals for April shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR870-920/tonne FCA, down by EUR90/tonne from March. Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR940-980/tonne FCA, down by EUR100/tonne from the previous month.

Some market participants also reported higher offer prices for US PP. Thus, PP block copolymer for April shipments was offered at an average of USD940-960 per tonne, CIF.
MRC

MOSCOW (MRC) -- Imports of Nizhnekamskneftekhim's general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Ukraine rose in the first two months of 2020 by 14% year on year to 1,800 tonnes, according to MRC's DataScope report.

This figure was at 1,580 tonnes in January-February 2019.

The share of Nizhnekamskneftekhim's material grew to 57% in the overall structure of imports to the Ukrainian market for the first two months of 2020 from 40% in January-February 2019.

February imports of Russian material increased by 57% to 1,100 tonnes from 700 tonnes in January 2020, imports were at 920 tonnes in February 2019. The share of Nizhnekamskneftekhim's GPPS and HIPS was 65% in February versus 39% a year ealrier.

Overall imports of these polystyrene grades into the country fell in the first two months of 2020 by 21% year on year to 3,140 tonnes from 3,950 tonnes in January-February 2019. The share of Iranian material in the total imports rose to 20% (620 tonnes) from 6% (250 tonnes) a year earlier, whereas the share of deliveries from Hungary grew to 19% (590 tonnes) from 10% (390 tonnes). Germany, one of the last year's largest importers, have not shipped material to the region since the beginning of this year.

MRC