Supply disruptions and stronger demand boosted petroleum product imports into US East Coast region in March

MOSCOW (MRC) -- Imports of petroleum products-gasoline, distillate, and other products into the East Coast region of the United States increased in March 2021, according to Hydrocarbonprocessing.

Rising imports resulted from lower domestic supply, higher demand, and higher domestic petroleum product prices compared with prices in Europe.

In March, East Coast petroleum product imports averaged 1.4 million barrels per day (b/d). In addition, East Coast gasoline imports averaged 737,000 b/d, the highest March level since 2009, and East Coast distillate imports averaged 421,000 b/d, the highest March level since 2003.

Petroleum product imports into the East Coast region increased primarily for three reasons.

First, domestic supply was reduced, due in part to the extreme winter weather in February 2021, which disrupted operations at several refineries in the US Gulf Coast region, where more than half of US refinery capacity is located. Because significantly more petroleum products are consumed in the East Coast region than its regional refineries produce, the region relies on imports and pipeline supplies from the US Gulf Coast region.

When production is disrupted in the U.S. Gulf Coast region (as was the case in February and March 2021), the East Coast region relies more on imports to meet its petroleum product demand. Lower supply, particularly in the East Coast region, has also been due, in part, to lower East Coast refining capacity after the 335,000 b/d Philadelphia Energy Solutions (PES) refinery closed in June 2019. According to estimation, closing the Philadelphia refinery reduced East Coast gasoline supplies by approximately 160,000 b/d and distillate supplies by approximately 100,000 b/d.

Second, domestic demand for petroleum products increased. US gasoline consumption increased to 8.6 million b/d in March, the highest level since February 2020, and distillate consumption increased to 4.0 million b/d, the highest level since November 2019.

Third, the prices of US petroleum products have been higher than in Europe. In March, the New York Harbor gasoline spot price averaged 30 cents per gallon (gal) more than gasoline in Europe, the widest spot price spread between these markets in the past 10 years (2012–2021).

As MRC informed earlier, in 2020, total consumption of fossil fuels in the United States, including petroleum, natural gas, and coal, fell to 72.9 quadrillion British thermal units (Btu), down 9% from 2019 and the lowest level since 1991, according to US Energy Information Administration's (EIA) Monthly Energy Review.

We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

MOSOCW (MRC) -- Negotiations on prices of European polyvinyl chloride (PVC) to be shipped in July to the CIS countries began this week. Traditionally, for the last few months, European producers have been experiencing a lack of supply and an upward price trend. Suppliers have announced a price increase of EUR40-50/tonne for July shipment, according to ICIS-MRC Price Report.

The July contract price of ethylene was agreed up by EUR40/tonne from the previous month, which theoretically allows to talk about an increase of EUR20/tonne compared with June level. But since the middle of last year, the main factor in the pricing of European producers has been the imbalance of supply and demand, which has led to a constant rise in prices for a long time. The lack of polymer in the region continued in July, and as a result, the upward trend remained.

European producers announced an increase in export prices for the markets of the CIS countries in July by EUR40-50/tonne. The growth in export prices of PVC in Europe has been recorded for more than a year, and during this time the price of PVC has more than doubled.

But the next record level of prices did not lead to a drop in demand, the demand for PVC still remained. Many market participants have not been able to replenish their inventories in full for at least the last three months.
This mainly was typical for K58/70 PVC.

As in the previous month, for the July shipments, some buyers reported the absence of PVC export quotas from certain producers in Europe due to scheduled maintenance works. Overall, deals for July shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were discussed in the range of EUR1,390-1,460/tonne FCA, whereas the previous month's deals were agreed in the range of EUR1,350-1,410/tonne FCA.
MRC

MOSCOW (MRC) -- Construction work on Evonik's new polyamide (PA) 12 complex at Marl Chemical Park is virtually complete and it will be taken into operation this year, as per the company's press release.

Construction of the new complex has been virtually completed in just under two years. The individual process units will now be taken into regular operation step-by-step. Full start-up is scheduled for the fourth quarter.

The complex creates 120 new highly skilled jobs. At the same time, it increases Evonik's production capacity for this high-performance polymer by more than 50% and gives it the world's largest PA 12 production complex in Marl (Germany).

Evonik has invested around half a billion euros in this future-oriented project. That is the largest investment in the company’s history in Germany.

The high-performance polymer polyamide 12 is used in attractive growth markets such as 3D printing, medical technology, automotive engineering, and as substitute for steel. Evonik's sites in Asia also offered attractive conditions for the construction of the world's most modern PA 12 complex.

Minister President Armin Laschet said: “Evonik’s decision to build its new polyamide 12 complex here is further strong evidence of the attractiveness of our federal state. Politicians have to make sure that economic policy provides the right conditions. If we, as the state government, had not started to dismantle unnecessary and restrictive regulations and free up the economy as soon as we took office, this facility might now be in Asia. To make Germany climate-neutral yet ensure it remains an industrial hub, we need a decade of modernization in which we reduce bureaucracy and speed up our planning and permitting processes.”

Christian Kullmann, chairman of Evonik's executive board, praised the fact that the new complex can start operating this year despite the pandemic-related restrictions as a “masterstroke by our team.” He added: “Three years ago, we decided to produce this leading high-tech German product for the world market here in the Ruhr region. We have kept our word and completion of the demanding construction phase is almost on schedule. That creates growth, value, and jobs.”

Evonik has been developing customized high-performance polymers for demanding applications for more than 50 years and is a global leader in the production of PA 12. VESTAMID compounds benefit from high demand in attractive markets, while the PA 12 powder VESTOSINT is used, for example, to coat metals for consumer goods, dishwasher baskets, and parts used in the automotive industry. For many years, Evonik has also developed special polymer powders that enable industrial production of high-tech components using 3D printing.

As MRC reported earlier, Evonik expects its global circular plastics program to generate additional sales of more than EUR350 million a year by 2030.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. The company is active in more than 100 countries around the world and generated sales of EUR12.2 billion and an operating profit (adjusted EBITDA) of EUR1.91 billion in 2020.
MRC

MOSCOW (MRC) -- Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe, said Hydrocarbonprocessing.

The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

As MRC informed previously, in late May, 2021, Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about USD596 million. And in early May, Shell announced the sale of its 149,000 barrel per day (bpd) refinery in Washington to Hollyfrontier Corp.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- A Louisiana parish council has approved a property tax exemption for a project that a company official said could be the saviour of independent refiner PBF Energy and its Chalmette, Louisiana refinery, said Hydrocarbonprocessing.

The exemption, approved late on Tuesday, will save PBF ГЫВ91 million over 10 years in property taxes for a new renewable diesel unit, according to documents filed by PBF with the council of St. Bernard Parish on the east side of New Orleans. PBF wants to use the tax break to attract a partner for the conversion of an idled hydrocracker, which made diesel from gas oil, into a renewable diesel unit that will make the truck fuel from animal fats.

"We see this project here not only as the saviour of the refinery but also the saviour of the company," said Chalmette refinery manager Steven Krynski, in remarks made before the council prior to the vote. Krynski said the company is $1.4 billion in debt from the downturn brought about by the COVID-19 pandemic in 2020, when lockdowns and work-from-home policies reduced demand for fuel. "Very few people realise how close we came to closing down last year not only as a refinery but as a company," Krynski said.

The renewable diesel produced by the plant will offset the cost of credits refiners need to comply with U.S. biofuel laws. In June, PBF posted outstanding biofuel and emissions credit obligations for the first quarter of 2021 amounting to USD848.3 million, up from USD118.4 million for the same quarter a year ago.

The renewable diesel unit is to be built between Oct. 1, 2021 and the end of 2023, according to the documents presented to the council. The project will create 600 jobs during construction and 20 new permanent jobs at the refinery after the unit is built. The refinery currently employs 516 people.

As MRC informed earlier, BF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC