Limetree Bay refinery may not have enough money to get through the early days of its restructuring

MOSCOW (MRC) -- A US bankruptcy judge raised concerns that Limetree Bay refinery on the Virgin Islands may not have enough money to get through the early days of its Chapter 11 restructuring, reported Reuters.

"I'm very worried it's not enough money," Chief United States Bankruptcy Judge David R. Jones said during a hearing on Tuesday.

Jones, who is based in Houston and a veteran of a number of refinery restructuring in the southern district of Texas, added that his liquidity concerns are among the worst he has ever had.

The refinery is due to receive up to USD25 million in interim financing as it tries to restructure nearly USD2 billion in debt. Jones approved the financing.

As MRC wrote previously, Limetree filed for Chapter 11 protection on Monday after spending more than USD4 billion trying to restart the refinery on St. Croix. But lawyers for Limetree say the refinery needs at least USD150 million in funding to maintain operational capabilities, complete ongoing repairs and retrofitting, fund necessary repairs identified by the US Environmental Protection Agency and establish a reserve for potential expenses.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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1. Refiners crude processing skids to 7-month low in India in May

MOSCOW (MRC) -- Indian refiners' crude throughput slipped to its lowest level in seven months in May as a raging second wave of coronavirus drove a slump in domestic fuel demand and crude imports, government data showed, said Hydrocarbonprocessing. Refiners processed about 4.5 million barrels per day (bpd) or 18.97 million tonnes of oil last month, data from the country's Ministry of Petroleum and Natural Gas showed. That was 7.7% below April levels but still 16% higher than a year earlier.



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MOSCOW (MRC) -- Crude oil futures were lower during mid-morning trade in Asia July 15 after the impasse between Saudi Arabia and the UAE on OPEC+'s oil production quotas for August showed signs of a resolution, alleviating concerns of near-term supply shortage, reported S&P Global.

At 11:05 am Singapore time (0228 GMT), the ICE September Brent futures contract was down 74 cents/b (0.99%) from the previous close at USD74.02/b, while the NYMEX August light sweet crude contract was down 70 cents/b (0.96%) at USD72.43/b.

The overnight progress in finding a compromise to the Saudi Arabia-UAE standoff with regards to oil production quotas for August and beyond, allayed concerns of the OPEC+ - a coalition of OPEC and other oil producers - alliance sticking to the prevailing July production policy for the months ahead, which was expected to result in supply tightness.

"Crude oil's rally fizzled on signs of stronger supply. Brent crude oil prices fell after news broke early in the session that Saudi Arabia and UAE were close to a deal on increasing production," ANZ analysts said in a July 4 note.

The deadlock was due to the UAE wanting to change its production baseline within the OPEC+ pact from 3.16 million b/d to a new April 2020 baseline of 3.84 million b/d, which it argued was fair and representative of current production.

"The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year. It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight," Edward Moya, senior market analyst at OANDA, said in a July 15 note.

As MRC wrote previously, earlier this week, Saudi Arabia and Oman called for continued cooperation between OPEC and other allied producers to stabilise and balance the oil market.

We remind that China's crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying. Imports totalled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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MOSCOW (MRC) -- South Korea's major petrochemical makers have recently stepped up efforts to boost production of polypropylene (PP) as base material demand for medical device manufacturing surged following the rollout of vaccination programs across Asia, opening the door for the country to import more petrochemical feedstock naphtha, reported S&P Global.

South Korea's demand for PP and polyethylene (PE), which are essential for making general medical devices including mask filters, plastic disposable syringes and hypodermic needles, as well as protective medical suits and gears, jumped by more than 34% in the first-quarter from a year earlier, according to downstream market analysts based in Seoul.

With many countries across East Asia kicking off their coronavirus vaccination programs in late Q1, South Korean medical device manufacturers are running their plants at full capacity for both domestic distribution and export of various plastic-based medical equipment.

Accordingly, South Korean petrochemical producers said they are well positioned to cater to the needs of medical equipment and hygiene product manufacturers, and the companies are keen to supply necessary materials.

South Korea's biggest petrochemical maker, Hanwha Total, has completed a four-year project to boost its PP production capacity, a company official said.

Under the project, Hanwha Total has built a new PP plant with a capacity of 400,000 mt/year, raising its PP production capacity by 55.6% to 1.12 million mt/year, the biggest in South Korea, from 720,000 mt/year previously.

In addition, Lotte Chemical said a new LDS, or Low Dead Space, syringe developed by South Korea's medical device manufacturer, Poonglim Pharmatech, has been selected as one of the main injection tools to be used in the nationwide vaccination process and the petrochemical maker plans to ramp up PP output as the company stands best to support manufacturing of the particular device.

As a result, South Korea's petrochemical feedstock naphtha requirement will likely trend higher over the coming months, according to Korea Petrochemical Industry Association.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

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MOSCOW (MRC) -- Saudi Arabia and the United Arab Emirates have reached a compromise over OPEC+ policy, an OPEC+ source said, in a move that should unlock a deal to supply more crude to a tight oil market and cool soaring prices, reported Reuters.

Brent oil prices fell on the news by as much as USD1 per barrel towards USD75 per barrel after Reuters reported the two major OPEC producers had agreed a deal.

In a statement on Wednesday, the UAE energy ministry said that a deal with OPEC+ on its baseline is yet to be reached and that deliberations are continuing.

The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, still need to take a final decision on output policy, after talks this month were abandoned because of the Saudi-UAE dispute.

OPEC+ had agreed record output cuts of almost 10 million barrels per day (bpd) last year to cope with a pandemic-induced slump in demand. The curbs have been gradually relaxed since then and now stand at about 5.8 million bpd.

The dispute between Riyadh and Abu Dhabi spilled into the open after the OPEC+ talks, with both airing concerns about details of a proposed deal that would have added an extra 2 million bpd to the market to ease oil prices that have recently climbed to 2-1/2 year highs.

While Saudi Arabia and the UAE both endorsed raising output immediately, the UAE had opposed extending the existing deal until December 2022 from April 2022 unless it was granted a higher production quota.

The OPEC+ source said Riyadh had agreed to Abu Dhabi's request to have UAE's baseline - the level from which cuts under the OPEC+ agreement on supply curbs are calculated - set at 3.65 million bpd from April 2022, up from 3.168 million now.

Giving the UAE a higher production baseline paves the way for extending the overall pact to the end of 2022, the OPEC+ source said.

Russia has been insisting on a quick output increase and has been among several countries mediating between Riyadh and Abu Dhabi to get a deal done as soon as possible.

OPEC+ has yet to take a final decision about the production deal. It was not immediately clear if other countries would also adjust their baselines.

The producers have said they will decide on a new date for the next meeting in due course.

We remind that as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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