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Australian Ampol sees slow recovery in jet fuel demand

February 26/2021

MOSCOW (MRC) -- Ampol Ltd, Australia’s biggest fuel seller, said on Monday it expects market conditions to remain challenging in 2021, with travel restrictions due to the coronavirus pandemic likely to continue denting fuel demand, said Hydrocarbonprocessing.

Ampol reported a AD145 million (USD114 million) loss in its refining business for 2020, down from earnings before interest and tax of AD70 million a year earlier, as it shut its Lytton refinery for an extended period of maintenance after fuel consumption collapsed.

The big refining loss comes as the company is set to decide in the second quarter whether it will close the refinery, potentially following BP Plc and Exxon Mobil Corp , which have decided to stop refining in Australia. Ampol said assuming a delayed recovery in jet fuel demand and continued domestic travel restrictions, it expects Australian fuel sales of around 13.5 billion to 14 billion litres in 2021.

That would be barely changed from the 13.6 billion litres sold in 2020, which was down 17% on the previous year. “Demand for jet fuel continues to be most impacted ... with significant uncertainty that international travel will resume in 2021,” Ampol said in its annual results.

Ampol’s jet volumes, which in normal times are largely linked to international travel, slumped 56% in the fourth quarter from the same period a year earlier. Diesel demand held up well, supported by demand from the mining sector, however a recovery in gasoline demand in late 2020 was curbed by snap lockdowns in some states in Australia.

“Current regional refining margins remain weak, but Lytton has the ability to produce around 6 billion litres in 2021, subject to market conditions,” the company said. Lytton produced 3.5 billion litres in 2020, down 40% on the previous year. Increased production will reduce the level of product imports in 2021, it added.

As MRC wrote before, Ampol brought forward the refinery turnaround to May, 2020, as refining margins crashed and extended the outage from two months to four months to the end of August to allow for social distancing of workers at the site.

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). Supply of exclusively PP random copolymer increased.
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry.
Category:General News
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