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MOSCOW (MRC) -- Asian refining margins
for 10 ppm gasoil rose on Monday, hovering close to multi-month highs touched
last week, buoyed by expectations for firmer demand and tighter supplies in
coming months, reported Reuters.
Refining margins, also known
as cracks, for 10 ppm gasoil climbed to USD7.34 per barrel over Dubai crude
during Asian trading hours, compared with USD7.01 a barrel in the last trading
session on Thursday. Cracks for the benchmark gasoil grade in Singapore have
surged 22.7% so far this month, Refinitiv Eikon data showed.
The regional
gasoil market is expected to strengthen further as countries roll out wider
vaccinations in coming days that would boost economic recovery and fuel demand,
market watchers said. Cash differentials for gasoil with 10 ppm sulfur content
were at a narrow premium of USD0.01/bbl to Singapore quotes, compared with a
discount of $0.04/bbl on Thursday.
Global oil and fuel prices are picking
up as demand returns to pre-pandemic levels amid easing coronavirus lockdowns in
key countries like China and India and signs of increasing road travel in
several countries. However, there are questions over how quickly refiners with
idled capacity can respond to increased demand. Analysts say the recovery pace
will vary by region and fuel type, and that jet fuel demand will remain the
weakest performer until more international air travel resumes.
As MRC informed before,
slumping fuel consumption during the pandemic is accelerating the long-term
shift of refining capacity from North America and Europe to Asia, and from
older, smaller refineries to modern, higher-capacity mega-refineries. The result
is a wave of closures, often centering on refineries that only narrowly survived
the previous closure wave in the years after the recession in 2008/09.
We
remind that PetroChina has nearly doubled the amount
of Russian crude being processed at its refinery in Dalian, the company's
biggest, since January 2018, as a new supply agreement had come into effect. The
Dalian Petrochemical Corp, located in the northeast port city of Dalian, was
expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude
in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has
the capacity to process about 410,000 bpd of crude. The increase follows an
agreement worked out between the Russian and Chinese governments under which
Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend
crude to PetroChina in 2018, or about 600,000 bpd. That would have represented
an increase of 50 percent over 2017 volumes.
Ethylene and propylene are
feedstocks for producing polyethylene (PE) and polypropylene
(PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2%
year on year. Only shipments of low density polyethylene (LDPE) and high density
polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to
the Russian market reached 1 240,000 tonnes in 2020 (calculated using the
formula: production, minus exports, plus imports, excluding producers'
inventories as of 1 January, 2020). |
