China to dominate Asia and Oceanian refinery capacity growth by 2024

MOSCOW (MRC) -- China is expected to lead the Asia and Oceania’s refinery capacity growth, contributing around 71% of the region’s total capacity growth by 2024. China is likely to add 2.6 MMbpd of refinery capacity by 2024, according to Hydrocarbonprocessing with reference to GlobalData, a leading data and analytics company.

The company’s report, ‘Refining Industry Outlook in Asia and Oceania to 2024 - Capacity and Capital Expenditure Outlook with Details of All Operating and Planned Refineries,’ reveals that refining capacity in Asia and Oceania is expected to increase by 3.6 MMbpd from 37.0 MMbpd in 2019 to 40.6 MMbpd in 2024 at an average annual growth rate (AAGR) of 1.9 percent. Out of Asia and Oceania’s total capacity additions, 2.0 MMbpd is expected to come from new-build planned projects, while the remaining 1.6 MMbpd is likely to come from the expansions of active/operational projects.

Adithya Rekha, Oil and Gas Analyst at GlobalData, comments: “Out of China’s total refinery capacity additions of 2.6 MMbpd by 2024, 1.2 MMbpd is likely to come from expansion of active projects and the rest 1.4 MMbpd is expected to be contributed by new-build projects by 2024. Among the refineries in China, Dayushan Island, Yulong, and Jieyang are the major refineries, accounting for most of the capacity additions in the country with a combined total of 1.2 MMbpd by 2024.”

GlobalData expects India to occupy the second place in terms of refinery capacity additions in Asia and Oceania by 2024. India is expected to contribute about 21% of Asia and Oceania’s refinery capacity growth, adding about 748 MMbpd by 2024. Among the refineries in India, Barmer and Nagapattinam II refineries account for most of the capacity additions with 180 MMbpd each by 2024.

Rekha concludes: “Thailand will be the third-highest country in Asia and Oceania to add about 125 thousand bpd by 2024 from the expansion of Sriracha I refinery.”

As MRC wrote before, China's crude oil throughput in November 2020 rose 3.2% on year, setting a record high on a daily basis, as a huge private refiner started trials of a new refining unit and state-owned refineries raised processing rates to meet annual targets. The country processed 58.35 million tonnes of crude in November, equivalent to 14.2 MMbpd, according to data from the National Bureau of Statistics (NBS) on 15 December, 2020. That exceeded the October record of 14.09 MMbpd. January-November throughput was 614.41 MMt, or 13.39 MMbpd, up 3.1% from the same period in 2019. Zhejiang Petrochemical Corp in early November started a 200,000 bpd crude unit, in addition to its existing 400,000 bpd refining capacity in eastern China.

We remind that in January 2020, Zhejiang Petroleum & Chemical Co Ltd, one of two new major refineries built in China in 2019, started up the remaining units in the first phase of its refinery and petrochemical complex. The complex is situated in east China’s Zhoushan city. The company, 51% owned by private chemical group Zhejiang Rongsheng Holdings, said it ha started test production at ethylene, aromatics and other downstream facilities, without giving further details.

Zhejiang Petrochemical started a first 200,000 barrels per day (bpd) crude processing unit in late May, 2019, following on from the start of a 400,000-bpd refinery owned by another private chemical major Hengli Petrochemical. The newly started units at Zhejiang Petrochemical should include a second 200,000-bpd crude unit, a 1.2 million tonnes per year (tpy) ethylene unit and a 2 million tpy paraxylene unit, according to several industry sources with knowledge of the plant’s operations.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Orion Engineered Carbons has raised its fourth-quarter guidance for adjusted EBITDA earnings to a range of USD64-67 million from the previously issued range of USD44-55 million given during its third quarter results on 5 November, said Chemweek.

The upwards adjustment by the carbon black producer is “predominantly attributable to our specialty carbon black business unit, driven by considerably higher volumes, which rose low-double digits sequentially,” says Orion’s CEO Corning Painter. The company also experienced “slightly less” seasonality than anticipated in its rubber carbon black business, where volumes declined mid-single digits sequentially, he says. "We believe both of these trends are an indication that our customers restocked their inventories, to some degree during the quarter, to better manage their supply chains," he adds.

The temporary nature of restocking, combined with broader uncertainties in the economy, make it difficult to forecast how demand will develop from now on, according to Painter. "However, our current order book indicates a strong January and we expect robust demand as the global economy recovers," he says.

Orion's fourth quarter and full fiscal year 2020 results are scheduled for release on 18 February.

As MRC informed earlier, Orion Engineered Carbons has acquired Evonik's 52% stake, and DEG's 15% stake, in Qingdao Evonik Chemical (QECC). QECC is a carbon black joint-venture established by Evonik, DEG and Jiaozhou Finance Investment Center in 1994, in Qingdao, China.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.

Orion Engineered Carbons is a worldwide supplier of Carbon Black. The company offers standard and high-performance products for Coatings, Printing Inks, Polymers, Rubber and other applications. Our high-quality Gas Blacks, Furnace Blacks and Specialty Carbon Blacks tint, colorize and enhance the performance of plastics, paints and coatings, inks and toners, adhesives and sealants, tires, and manufactured rubber goods such as automotive belts and hoses.
MRC

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for January shipments to the CIS markets began on Monday. As expected, European producers announced a further increase in export PVC prices - by EUR20/tonne and higher - because of higher feedstocks prices, according to ICIS-MRC Price report.

January contract price of ethylene was agreed up by EUR65/tonne from the previous month, which theoretically allows to talk about an increase of EUR32,5/tonne in the net cost of PVC production. But amid strong demand from both the domestic and export markets, European producers raised their export prices for the CIS markets in January by EUR20-40/tonne.

Demand for PVC subsided significantly from consumers in the CIS countries in January under the pressure of seasonal factors, partially because of long New Year's outages of production capacities. Supply of resin from European producers also increased, but there is still no surplus of material.

Overall, deals for January shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR875-965/tonne FCA, whereas the previous month's deals were discussed in the range of EUR855-925/tonne FCA.
MRC

1. OPEC crude output cuts should help US shale profits in 2021

MOSCOW (MRC) -- A decision by OPEC and allied countries to cut crude production through March delivered a late Christmas present for US shale firms that have slashed costs, but any rise in prices spurred by the unexpected move may be just a modest stocking stuffer, reported Reuters. US crude oil production has fallen 2 million barrels per day in the last year as low prices and demand forced shale producers to cut their losses. Investors had already been pressuring the industry to curb spending and boost returns before the pandemic hit. Shale output was quickly cut, but might return quickly if prices keep rising. Last Tuesday, Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily reduce its production by 1 million barrels per day (bpd) in February and March, after Russia pushed to increase output, worried about US shale capitalizing on the group’s cuts. Russia and Kazakhstan will increase their output, reluctant to cede market share to the United States. Overall, OPEC+ had been due to restore 500,000 bpd in each of the two months. Saudi officials were concerned new increases would outpace demand during new coronavirus lockdowns.




MRC

MOSCOW (MRC) -- Map Ta Phut Olefins Co Ltd (MOC), a subsidiary of Thailand’s SCG Chemical, has completed the maintenance work at its cracker in Map Ta Phut, reported CommoPlast.

Thus, the cracker with the capacity of 900,000 mt/year of ethylene and 450,000 mt/year of propylene was shut for a scheduled turnaround on 2 November, 2020, and fully resumed operations in the fourth week of December, 2020.

Meanwhile, the company’s downstream plants including the 720,000 tons/year polypropylene (PP) unit and 980,000 tons/year high density polyethylene (HDPE) lines have also resumed operating.

MOC took these units offline in November 2020 for 45-days maintenance.

As MRC informed before, Siam Cement Group’s (SCG) proposed flexible-feed cracker project in Vietnam is being configured to take as much as 80% propane as feedstock for production. The USD5.4bn Long Son Petrochemical (LSP) Complex in Vietnam’s Ba Ria-Vung Tao province “is designed to use up to 20% - 80% propane”, SCG stated in a July 2020 presentation to investors, citing low cost of this feedstock during the summer and winter seasons.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC