India June crude imports dropped to their lowest level in eight months as virus dampens demand

India June crude imports dropped to their lowest level in eight months as virus dampens demand

MOSCOW (MRC) -- India’s crude oil imports in June dropped to their lowest level in eight months as refiners cut down processing in the face of a tumultuous second wave of the coronavirus, government data showed, said Reuters.

Crude oil imports rose in June by 16.3% to 15.90 million tonnes from a year earlier, but dropped 7.8% from May, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed. “Refiners reduced runs after the COVID-19 cases increased in April-May, which might have contributed to lower imports,” said Refinitiv analyst Ehsan Ul Haq, adding that the nation’s vaccine programme is the key to future demand. “If we don’t see another wave, demand will recover significantly in the fourth quarter of this year."

India’s coronavirus caseload of 31.48 million infections is the world’s second-highest behind the United States. Oil product imports rose 11% to 3.51 million tonnes from the previous month, while refined products exports slipped about 4% to 5.51 million tonnes in June. Diesel shipments were down 3.8% from the preceding month, while petrol exports slipped 14%.

India imports and exports refined fuels as it holds surplus refining capacity. The world’s third-biggest oil importer and consumer, India has decided to commercialise half of its current strategic petroleum reserves as the nation looks to enhance private participation in the building of new storage facilities, two government sources told Reuters.

Indian refiners’ crude throughput in June was little changed from the previous month when it fell to multi-month lows, data showed last week. Julie Torgersrud from Rystad Energy’s Oil Market team expects crude processing by Indian refiners to grow by 200,000 barrels per day (bpd) in third quarter following a drop in second quarter. “However, we still expect India’s refinery runs in 2021 to average nearly 300,000 bpd below pre-pandemic levels as the lag in jet fuel recovery keeps runs in check."

Meanwhile, 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.
MRC

SIBUR increased profit by 60% in the second quarter

SIBUR increased profit by 60% in the second quarter

MOSCOW (MRC) - The largest Russian petrochemical holding SIBUR in the second quarter of 2021 increased its net profit by 60% to 76.43 billion rubles from 47.8 bn rubles a year earlier, mainly due to an increase in prices for its products,the Russia-headquartered producer said.

Adjusted net profit of the holding excluding exchange rate differences in the second quarter increased to 62.8 bn rubles from 4.2 bn rubles in the same period in 2020. Thus, in the second quarter, the company's revenue, compared to the first, increased by 15.8% and amounted to 200.9 bn rubles. Increased by 39.9% and net profit - excluding exchange rate differences, amounted to 62.8 bn.

The company's total debt at the end of the second quarter decreased by 4.4% compared to the end of the previous year, to RUB 388.08 bn.

The company's revenue for the first half of the year increased by 59% year-on-year to RUB 374.24 bn.
The company's EBITDA grew 2.3 times year-on-year to RUB 169.98 billion. EBITDA margin in the second quarter was 48.4% versus 42.4% at the end of the first quarter of 2021. The holding's capital investments in the reporting period decreased by 12.1% and reached 22.2 bn rubles.

In the first half of the year, SIBUR's gas processing plants processed 9.85 bn cubic meters of associated petroleum gas (APG), a decrease of 9.6% from a year earlier, the report said.

Fractionation volume of broad fraction of light hydrocarbons increased by 2.9% year on year and amounted to 3.96 m tonnes. Liquefied petroleum gas sales volumes fell 25.2% to 1.37 m tonnes. Sales of naphtha increased by 3.2% compared to the previous year - up to 506.65 thousand tons. At the same time, polypropylene sales increased by 20.3% - up to 612,000 tonnes. Polyethylene sales volume increased by 48.3% to 818,000 tonnes.

Sales volumes of petrochemical products in the second quarter of this year decreased by 4.8% to 1.3 m tonnes in annual terms. Polypropylene sales during this period increased by 9.2% to 291 thousand tons, polyethylene sales decreased by 8.4% to 383,000 tonnes, the company said.

In April, SIBUR announced a merger with TAIF by exchanging 15% of its shares for 50% + 1 share in TAIF. The scope of the transaction includes only TAIF's petrochemical and generating companies. This merger will increase the scale of SIBUR's operations and strengthen its market leadership. SIBUR and TAIF expect to reach final terms and close the deal in the second half of 2021. TAIF together with SIBUR will spend more than 1 trillion rubles. for the implementation of joint projects. In total, the companies plan to implement over 30 projects.

As per MRC's Sacnplast, SIBUR Tobolsk / Zapsibneftekhim increased capacity utilization in June, the total production of polypropylene reached 97,900 tonnes versus 76,900 tonnes a month earlier (in late April - early May, the company carried out preventive maintenance works). Tobolsk complex's PP overall output reached 537,200 tonnes in the first six months of 2021, up by 28% year on year.

SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.).
MRC

COVID-19 - News digest as of 30.07.2021

1. Shell raises dividend by almost 40% amid soaring oil prices

MOSCOW (MRC) -- Royal Dutch Shell has raised its dividend almost 40 per cent and launched a USD2bn share buyback scheme, as the energy major takes advantage of stronger energy prices to try to attract back investors, said The Financial Times. Thursday’s moves, which came as the group reported a jump in second-quarter earnings helped by oil’s recovery above USD70 a barrel, were more aggressive than analysts had anticipated and show the pressure on energy majors to resurrect flagging share prices. France’s TotalEnergies also reported strong results on Thursday with its highest half-year earnings in five years, and will use some of its cash flow for share buybacks. Investors remain wary of a sector that has been hard hit by two price slumps since 2015 while facing the long-term challenge of a possible peak in oil demand and increasing government action to tackle climate change.


MRC

Crude prices continue rising on weaker US dollar and tightening inventories

Crude prices continue rising on weaker US dollar and tightening inventories

MOSCOW (MRC) -- Crude prices extended their rally July 29, settling higher on the back of a weaker US dollar and tightening inventories, reported S&P Global.

NYMEX September WTI settled USD1.23 higher at USD73.62/b and ICE September Brent moved up USD1.31 to USD76.05/b.

Oil futures gleaned support from a weaker US dollar and rising risk appetite supported by a dovish tone taken by US Federal Reserve chairman Jerome Powell, analysts said.

"Oil prices are surging as risk appetite runs wild following disappointing economic data that solidifies the view that the Fed won't be slowing down its ultra-accommodative stance anytime soon," OANDA analysts said in a July 29 note.

"Strong earnings and a cautious US central bank bodes well for crude, which saw the rally slow heading into Fed day," they added. "The biggest downside risk to oil prices now is unsurprisingly the delta variant rapidly spreading and weighing on the economic recovery going into the end of the year."

NYMEX August RBOB settled 4.32 cents higher at USD2.3514/gal and August ULSD climbed 3.34 cents to USD2.1894/gal.

Powell, during a press conference following a July 28 Federal Open Markets Committee meeting, indicated the US economy had farther to go before easing the Fed's current supportive stance. The comments proved bearish for the US dollar, which in turn is supportive for crude prices.

The ICE US Dollar index fell to 91.86 in afternoon trading, on pace for the lowest close since June 25.

Meanwhile, US crude supply outlooks remain bullish following a 4.09 million-barrel inventory draw in the week ended July 23 and a decline in drilling activity.

"Sentiment was buoyed by falling inventories across several markets and an easing of fears that the recent surge in COVID-19 cases would hurt demand," ANZ analysts said in a July 29 note.

"The falls suggest the rise in cases of COVID's delta variant is having little impact on mobility. While health authorities remained concerned about its spread, the high level of vaccination has prevented widespread restrictions," the ANZ analysts said in the note.

As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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.
MRC

North Huajin Refining and Petrochemical picks Lummus and Chevron Lummus Global for petrochemical complex in China

North Huajin Refining and Petrochemical picks Lummus and Chevron Lummus Global for petrochemical complex in China

MOSCOW (MRC) -- Lummus Technology and Chevron Lummus Global LLC (CLG) announced multiple technology contracts from North Huajin Refining and Petrochemical Co., Ltd. for a grassroots refinery and petrochemical complex in Liaoning Province, China, according to Hydrocarbonprocessing.

The complex will include one of the largest vacuum residue desulfurization (VRDS) units in China and one of the largest Novolen polypropylene (PP) plants. Lummus will provide the license and basic engineering for its Novolen PP technology, plus the associated catalysts. CLG will provide the license and basic engineering for the VRDS technology, plus proprietary reactor internals and catalysts.

Once complete, the VRDS unit will process 5 MMTPA of vacuum residue, providing hydrotreated feed for the downstream conversion unit while simultaneously producing low sulfur bunker oil that meets International Maritime Organization (IMO) specifications. The Novolen plant, embedded in a compact plot area, will produce 1,000 KTA of polypropylene homopolymers, random copolymers, and impact copolymers - making it one of the largest in China – with high-end products encompassing the complete portfolio.

As MRC informed before, in April, 2021, Lummus Technology was awarded a master licensor contract by PJSC Nizhnekamskneftekhim for its ethylbenzene, styrene monomer (SM), ethylene dimerization and olefins conversion technologies. These four plants will be part of the expansion of an olefins production facility in Nizhnekamsk, Russia. The dimerization and olefins conversion units will be the first in Russia.

According to MRC's ScanPlast report, 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.
MRC