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South Korea data: US crude imports suffer biggest ever on-year drop in May

June 29/2020

MOSCOW (MRC) -- South Korea's crude oil imports from the US in May dropped 35.7% from a year earlier, which marks the biggest decline since the country began US crude imports, data released by Korea National Oil Corp. showed June 24, said S&P Global.

South Korean refiners imported 7.407 million barrels of US crude in May, compared with 11.516 million barrels a year earlier, according to the KNOC data. The 35.7% decline was the sharpest since South Korea began US crude imports on a regular basis in 2015.

The May shipments were down 50% from 14.827 million barrels in April that marked the biggest since South Korea began US crude imports, breaking the previous record high of 14.78 million in July 2019. South Korea's US crude imports marked the first decline in December last year when shipments fell 2.1% from a year earlier, and second time in February this year when US shipments fell 0.9% year on year.

The decline in May was largely attributable to less competitive prices of North American grades, as well as tepid domestic and regional fuel demand as economic activities slowed down due to restrictions to contain the spread of COVID-19, according to a refinery official in Seoul.

Major refiners across South Korea, China and Southeast Asia said Asia's overall US crude imports could recede from Q3 as they no longer find WTI, Bakken and Eagle Ford grades attractive, S&P Global Platts reported previously.

Despite the latest hike in Saudi OSP differentials for July-loading cargoes bound for Asia, many refiners would continue to favor Persian Gulf cargoes over US export grades, including WTI Midland and Eagle Ford, due to the prevailing high long-haul freight rates, Platts reported previously.

The KNOC data showed South Korea's crude imports from its top supplier Saudi Arabia climbed 14.7% year on year to 28.857 million barrels in May, from 25.154 million barrels a year earlier, driven by Aramco's lowering of export prices earlier this year.

Imports of Iraqi crude dropped 44.2% on year to 5.34 million barrels in May, South Korea's import of Iraqi crude has declined since November 2019 when the country received 13.54 million barrels.

South Korea received 2.057 million barrels of Forties from the UK, marking the first North Sea crude shipment since August last year when it took 2.024 million barrels. South Korea's total crude imports in May fell 6.3% from a year ago to 78.83 million barrels.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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