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Crude oil imports to rebound in November in Asia

November 26/2021

MOSCOW (MRC) -- Asia's imports of crude oil are likely to have rebounded in November to the highest this year amid pre-winter buying by top consumers and despite widespread disquiet among buying countries over high prices, said Hydrocarbonprocessing.

Imports by the world's top-consuming region are estimated at 26.35 MMbpd for November by Refinitiv Oil Research, up strongly from October's 22.55 MMbpd. For most of the year Asia's imports of crude have lagged the prevailing global narrative of a recovery in demand and tight market supply, with these factors applying more to North America and Europe.

However, there are some factors at play that call into question whether China's resurgent November imports are a flash in the pan or the start of a renewed uptrend. Imports are likely to have been boosted by the government granting new quotas to some independent refiners, which had to be used by the end of the year.

This led to a flood of buying from the these refiners, especially of Russian ESPO crude, which saw spot premiums for the grade rise to their highest since January 2020. The premium of ESPO over Dubai crude reached $6.35 a bbl on Nov. 16, having climbed from a recent low of USD1.90 on Aug. 17.

However, it has subsequently dropped back to around $4.10 a bbl amid subdued interest from Chinese independents for January-loading cargoes. Another factor that may affect China's imports in the first quarter of next year is the potential for more oil to be sold from the Strategic Petroleum Reserve (SPR).

Beijing has so far been coy about its plans to join the U.S.-led release of crude stockpiles, saying on Wednesday that it was working on its own release according to its own needs. By not making a firm commitment to release crude from its SPR, China creates uncertainty in the market over its future import needs, although it's likely that Beijing will take some action as the messaging has been clear that the authorities believe oil prices are too high.

As per MRC, South Korea's crude oil imports in October rose 1.9% from a year earlier, reflecting the country's rising refinery run rates as Seoul rapidly eases COVID-19 restrictions, while major refiners plan to actively purchase spot cargoes from non-OPEC producers amid tight Middle Eastern supply. The world's fifth-biggest crude importer received 11.419 million mt, or 83.7 million barrels, of crude oil last month, compared with 82.14 million barrels imported a year earlier, data from the Korea Customs Service showed. The October imports were also up 6.4% from 78.63 million barrels received in September.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry.
Category:General News
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