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China to be self-reliant in IMO-compliant fuel

June 23/2020

MOSCOW (MRC) -- Chinese refiners have the capacity to produce 18.1 million tons of low-sulfur fuel oil (LSFO) this year, which would make the country self-sufficient in the new shipping fuel, an official with state major PetroChina said, said Hydrocarbonprocessing.

China has been striving to reduce its reliance on bunker fuel imports and is aiming to create its own marine fuel hub to supply northern Asia. About 20 refineries, mostly under state-run Sinopec Corp, PetroChina, CNOOC and Sinochem, installed equipment to produce 0.5% sulfur fuel that meets International Maritime Organization (IMO) rules that came into force at the start of this year.

China will be able to produce 22.6 million tonnes of the IMO-compliant fuel in 2021, rising to 29.6 million tonnes in 2022, Zhang Tong, a vice president of PetroChina International said at the debut of an LSFO futures contract on the Shanghai International Energy Exchange.

Zhang said if China fully releases the production capacity, the country would well be self-sufficient in supplying its bonded marine fuel market, which serves international shipping, estimated at about 12 million tonnes a year.

Before 2020, China imported almost all its bonded bunker supplies of high sulfur fuel oil from regional exporters such as Singapore and South Korea. By close of morning trade,the front-month INE LSFO contract ended the session 10.5% higher at 2,617 yuan (USD369.83) per tonne, with open interest of 19,842 lots, each of 10 tonnes.

Chinas second oil product open to foreign investment after Shanghai crude oil, the new marine fuel futures is expected to attract strong investor interest from the oil industry, financial institutions and retail investors.

Ethylene and propylene are feedstocks for producing PE and 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.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, ethylene, propylene, petrochemistry.
Category:General News
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