Sinopec boosts refineries Apr crude run by 8% from March

MOSCOW (MRC) -- China's Sinopec increased its April utilization rate by about eight percentage points from March as more and more of its refineries raised crude runs to levels that were reported prior to the spread of COVID-19, a survey by S&P Global showed.

As a result, China's throughput is likely to hit 12.5 million b/d in April, or 90% of the level achieved in January, after falling by about 3.3 million b/d in February, Platts data showed.

The survey saw 16 refineries - accounting for 68% of Sinopec's total refining capacity - lift their combination run rate to 80% in April, from the 72% polled in March and 64% in February, closing in on January's rate of about 89% when the country had yet to be put under complete lockdown following the outbreak of the coronavirus.

Seven of the polled Sinopec refineries raised their April operating rates to the level recorded in January and December. In contrast, only two had done so in March.

Except for the Zangzhou refinery in central China, the rest of these seven refineries are along the developed coastal regions in the south and east of China, where demand rose at a faster pace than in the north and the landlocked west, where PetroChina's refineries are located.

Almost all the surveyed refineries saw an increase in April planned throughput, than in March, as gasoil and gasoline demand rose with the resumption of economic activity and as the number of fresh COVID-19 cases plateaued in China.

Even the 260,000 b/d Gaoqiao Petrochemical in Shanghai, which had shut its No.3 FCC in April for maintenance, lifted its planned crude run slightly to 73% in April from 72% in March.

Meanwhile, the 170,000 b/d Sinopec-SK Wuhan Petrochemical hiked its utilization rate by two percentage points on the month to 61% in April as Wuhan city is no longer under lockdown since early this month.

Only the flagship 460,000 b/d Zhenhai Petrochemical in eastern China Ningbo reduced its April crude run to 65.6%, from 75% in March, as it has shut a 160,000 b/d CDU for maintenance.

However, throughput recovery is likely to be capped as the outlets for export of oil products are limited in light of lockdowns across the world, which has sapped global demand, a Shandong-based Sinopec refiner said.

Its peer, PetroChina, has cut a combination run rate in six refineries to 60% in April from 63.3% in March and 65% in February, with the heaviest reductions from the exporting PetroChina plants, Platts report previously.

Independent refineries in Shandong province raised their average run rate to over 60% this week and are expected to up this to 70% by the end of this month, Platts reported.

Platts will publish the final April throughput survey for about 19 of Sinopec's refineries, 17 of PetroChina's and one CNOOC refinery later this month.

We remind that, as MRC wrote before, Sinopec Qilu Petrochemical, a subsidiary of Sinopec Corporation, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 2020.

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

According to MRC's ScanPlast report, 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.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

MOSCOW (MRC) -- Exxon Mobil Corp operates it 502,500 barrel-per-day Baton Rouge, Louisiana, refinery at low capacity utilisation as poor demand has pushed up inventories and filled storage tanks, reported Hydrocarbonprocessing with reference to sources familiar with plant operations.

The number of contract workers at the Baton Rouge refinery was cut by 1,800 people as Exxon begun informing service companies of planned spending cuts.

The refinery’s production was cut to about 440,000 bpd, the sources said.

The number of contract workers at the refinery is usually 2,000 and increases when major overhauls are underway, the sources familiar with operations said.

Contract workers are employed by the third-party service companies that Exxon has been informing of its spending plans.

Social distancing and working from home to prevent the further spread of the coronavirus in the United States has reduced demand for motor fuel across the country. At least three refineries in California have cut production as well.

Exxon’s Baton Rouge refinery restored full production on March 9 after it was shut by a Feb. 12 fire.

The Baton Rouge refinery is the second-largest in Louisiana and Exxon’s second-largest in the United States.

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, which has a capacity of more than 800,000 t/y.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Exports of suspension polyvinyl chloride (SPVC) from Russia totalled 45,600 tonnes in the first three months of 2020, down by 4% year on year. Imports increased, but still remained at a low level, according to MRC's DataScope report.

Last month's exports of Russian suspension (excluding shipments to the countries of the Customs Union ) were about 12,500 tonnes, compared to 15,900 tonnes in February. Some producers slightly reduced their exports in March due to weaker demand for resin in foreign markets. Thus, overall exports totalled 45,400 tonnes in the first three months of 2020 versus 47,300 tonnes a year earlier.

Indian buyers were the main foreign importers of Russian resin this year. Overall sales of resin exceeded 20,000 tonnes over the stated period. Belarus and Poland with shipments of 8,000 tonnes and 5,000 tonnes, respectively, occupied the second and third positions.

July 2019 accounted for the peak of imports of resin because of scheduled shutdowns for maintenance at SayanskKhimPlast and Bashkir Soda Company' production capacities, and shipments totalled 13,700 tonnes. Overall imports of resin were 2,600 tonnes in January-March 2020, up by 29% year on year. At the same time, quantities were still insignificant, despite the increase in imports.

MRC

1. Sasol undetakes further actions in response to fast-developing coronavirus

MOSCOW (MRC) -- Following Sasol’s (Johannesburg) announcement on 17 March of steps it is taking to overcome its financial problems, the company has informed the Johannesburg stock exchange that it is taking further actions in response to the fast-developing coronavirus disease 2019 (COVID-19) pandemic, reported Chemweek. The company said that “a small number of Sasol employees have tested positive for COVID-19 and are receiving full support.”


MRC

MOSCOW (MRC) -- Austrian-based petrochemical producer Borealis last week issued a force majeure declaration for its Stenungsund steam cracker in Sweden, the company told S&P Global Tuesday.

"On 8 April 2020 Borealis had to declare force majeure (FM) for its cracker operations in Stenungsund, Sweden as a consequence of a technical incident. Affected customers have been informed of potential reductions of delivered volumes. At this point in time we do not know when the FM will be revoked," a company spokesman said.

Borealis' cracker in Stenungsund can produce 625,000 mt/year of ethylene. The company's other cracker in Porvoo, Finland, can produce 400,000 mt/year of ethylene. Both crackers are able to process a mix of feedstocks including liquids, LPG and ethane.

Last week, Borealis said it had lowered its steam cracker operating rates.

"Our steam crackers are ... operating at reduced rates due to Covid-19 impact as overall demand is lower," Borealis said, without giving further details.

Resin converter sources said that both the Borealis FM and other refinery and cracker run rate reductions had impacted production of key polyethylene grades used in the supply of resin to key flexible packaging used in the food, pharmaceutical and hygiene segments, where demand has been strong since March due to the coronavirus pandemic.

The refinery and cracker operating cuts were introduced in the aftermath of the collapse in the oil price and the coronavirus lockdowns across Europe, which conspired to tighten the supply of products such as plastics, and some producers of these resins have seen more limited supplies as a result of the production cuts in place up the supply chain, sources said.

Cracker output is being limited, a polymer trader said Tuesday, as is refinery output. "First of all, naphtha will be reduced ... If you don't produce gasoline. If you reduce gasoline in general by 25-50% I think its a good time to buy (cracker products such as PE resin grades). I think that there will be some bottlenecks from some refineries and polymer plants (as a result)", the trader said.

The trader said he had seen reductions in his supplies of low and linear low density PE and "was asked to wait until the second half of April, and they have to keep [them] for other applications/medical buyers. They have cut allocations to 50% and are now struggling to get the other part in the second half of the month, which shows me that supply is tight."

As MRC informed before, in early October 2019,, Austrian polyolefin supplier Borealis AG lifted a force majeure declared in the previous months at its production site in Kallo. On 2 Sep, 2019, the company declared force majeure on refinery grade propylene and propane from its production site in Kallo, Belgium, as a consequence of “unforeseen technical issues."

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.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC