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Asian refiners' refining margins fell sharply
As more countries around the world impose further travel restrictions and restrict domestic movement, margins on refining to produce transportation fuels have fallen to new lows
in years or months as part of measures to slow the spread of the coronavirus.
According to Refinitiv data, global refiners' profits from transportation fuel fell further, with gasoline production margins turning negative for the first time in more than a year
.
Asian refineries are currently losing 78 cents per barrel of gasoline produced by refining Brent crude, the biggest loss in 13 months
.
Asia's jet fuel refining margin has fallen to $4.
71 a barrel, the lowest level
since Refinitiv began tracking the data in March 2009.
The pandemic forced petrochemical producers to change their maintenance schedules
As a result of the pandemic, it has been difficult for staff to be fully staffed, and demand for chemicals has weakened, petrochemical producers and refiners have begun to change their shutdown schedules
.
Saudi Basic Industries (SABIC) has postponed a shutdown
scheduled for April at the Wilden pyrolysis plant in the UK.
Market sources said the company may have made this decision against the backdrop of the spread of the novel coronavirus, as plant shutdowns often require a large number of additional personnel on-site to manage downtime work
.
Paolo Scafetta, a senior analyst at Axis Inc.
, said other manufacturers may choose to extend their maintenance plans to avoid losses
.
Pyrolysis plant operators in Europe may take steps to reduce operating rates or take other measures to remain profitable
.
"Manufacturers can postpone scheduled downtime, reduce operating rates or, finally, declare force majeure to avoid losses
in the second quarter, especially in April and May," he said.
The Eurasian pyrolysis plant considers using more naphtha raw materials
The coronavirus pandemic and the collapse in crude oil prices have caused petrochemical raw material prices to plummet
worldwide.
While inventories of most olefins and their derivatives remain elevated, cracker operators are beginning to change their feedstock purchase plans to capitalize on the temporary uptick in olefin production margins
.
The sharp drop in oil prices has changed the outlook for cracker operators in Europe, with naphtha prices falling even more
relative to other feedstocks.
Affected by economics, Asian petrochemical producers are considering using fewer liquefied petroleum gas (LPG) feedstocks
than originally planned in the coming months.
Already 17 cracker operators in Asia have said they will use more naphtha feedstock
immediately.
The head of raw material procurement for a petrochemical company in Northeast Asia said: "Naphtha is currently more economical to crack than LPG
.
”
Japan's Idemitsu Industries plans to sell part of its lubricant business
Japan's Idemitsu Kosan announced plans to sell its wholly-owned subsidiary, Shell Lubricants Japan, back to Shell, and the two companies will begin discussions to acquire all of Shell Japan Lubricants' shares and the right to
use the Shell-branded lubricants business.
With the domestic market shrinking, Idemitsu Kosan is looking for more overseas opportunities
.
A spokesperson for Idemitsu Kosan said: "We find it difficult to continuously manage the lubricant business of different competing brands to find synergies
.
Therefore, we are in talks
to sell the (lubricants) business.
As mentioned in our medium-term management plan, we aim to grow our lubricants business
overseas and in new markets by developing products such as electric vehicle fluids and innovative greases.
”
