rongsheng petrochemical singapore pte ltd pricelist

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With the entire phase 2 project online, ZPC expects to lift its combined petrochemicals product yield to 71% from 65% for the phase 1 refinery, according to the source.

"Petrochemical contributes most of the companies" profit with healthy demand growth while the stakeholders have feedstock demand for their textile plants too," the source said.

Zhejiang Petroleum, a joint venture between ZPC"s parent company Rongsheng Petrochemical and Zhejiang Energy Group, planned to build 700 gas stations in Zhejiang province by end-2022 as domestic retail outlets of ZPC.

Established in 2015, ZPC is a JV between textile companies Rongsheng Petrochemical, which owns 51%, Tongkun Group, at 20%, as well as chemicals company Juhua Group, also 20%. The rest 9% stake was reported to have transferred to Saudi Aramco from the Zhejiang provincial government. But there has been no update since the agreement was signed in October 2018.

Rongsheng Petro Chemical Co, Ltd. specialises in the production and marketing of petrochemical and chemical fibres. Products include PTA yarns, fully drawn polyester yarns (FDY), pre-oriented polyester yarns (POY), polyester textured drawn yarns (DTY), polyester filaments and polyethylene terephthalate (PET) slivers.

Saudi Aramco today signed three Memoranda of Understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China. The company aims to acquire a 9% stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical. Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.

An integral part of the project includes a third agreement with Zhejiang Energy to invest in a retail fuel network. The companies plan to build a large scale retail network over the course of the next five years in the Zhejiang province. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.

PVTIME– Rongsheng Petrochemical Co., Ltd., (002493.SZ) (hereinafter referred to as Rongsheng) announced that the 300,000MT EVA device was successfully put into operation on December 28, 2021, and its photovoltaic products have been successfully produced with 28% VA content.

These products were produced by the ‘40 Million MT/Year Integrated Refining and Chemical Project (Phase II)’, which invested by Zhejiang petroleum & chemical Co., Ltd., a holding subsidiary of Rongsheng. The project based in Green Petrochemical Base, Zhoushan City, China, with an annual output of 300,000MT PV products.

Furthermore, as early July this year, Rongsheng revealed in its interaction with investors that Zhejiang project (Phase II) is undergoing. The EVA device can produce all photovoltaic products, and it may make an expansion of EVA production capacity in the future.

The newly-built highly-integrated mega Chinese refinery-cum-petrochemical complexes are immensely more efficient than the 50-60 year-old clunkers that they are replacing across the globe spanning from the U.S. west coast to the Philippines, bringing a new paradigm to the oil market, they said.

Even though Chinese refineries are built primarily to cater to the domestic market, the export market is a safety valve whenever there is an imbalance in fuel or petrochemical demand, which easily amounts to 1 million b/d in an average month. Such volumes weigh heavily on inefficient, standalone sites that are increasingly exposed and consequently shuttered.

The world’s largest crude oil importer shipped out 4.52 million mt of gasoline, diesel and jet-kerosene in October, up 73% from the 2.62 million mt exported in September, General Administration of Customs data showed. The volumes were little changed from a year ago, which were weighed by a 72% collapse in jet-kerosene shipments due to the virtual grounding of international air travel.

The new sites coming onstream in China typically have processing capacities of 300,000 b/d or more and are integrated with petrochemical units that allow them to swing from a so-called petrochemical to an oil-product mode as the economics dictate.

So far in Asia, Royal Dutch Shell announced the closure of its 60-year-old 110,000 b/d Tabangao refinery in the Philippines and plans to cut capacity by half at its biggest 500,000 b/d facility in Singapore. Shell said it aims to have just six integrated refineries by 2025.

One of the export quota recipient, Zhejiang Petrochemical Corp. (ZPC) was given 1 million mt. The company, which is majority owned by Rongsheng Petrochemical Co., is in the final stages of getting the second phase of its 800,000 b/d refinery up and running.

Drug makers Pfizer and BioNTech said on Monday that their vaccine was more than 90% effective in preventing COVID-19, raising hopes that the pandemic, which eroded global fuel demand, may be controlled, trading sources said. Crude oil surged on the news with ICE Brent up 6.1% on-day to $42.74/bbl as of 4:30 pm Singapore time.

The January/March Singapore 92 RON spread remained in contango although the spread shrank to minus $0.80/bbl on Tuesday from minus $0.85/bbl in the previous session.

"There may be a small uplift in air travel around mid-to-late 2021, assuming travel bans, restrictive measures are lifted, as people rush to travel after being grounded for so long. But then, it will still take time before market confidence returns to 100%," said April Tan, IHS Markit downstream research associate director in Singaporean.

In the petrochemical sector, demand for polyester, derived from purified terephthalic acid (PTA), paraxylene and mixed xylene (MX), could improve as a life returns to normal, a petrochemical producer said.

A bumper 10 million-barrel spot crude oil purchase by Rongsheng Petrochemical suggests it is keen to get the second phase of its massive 40 million mt/yr, or 800,000 b/d, refinery and chemical project at subsidiary Zhejiang Petrochemical Co. Ltd (ZPC) running in the coming months, trading sources said.

Rongsheng announced in August plans to begin trial runs at the second 400,000 b/d tranche of the project in the fourth quarter of 2020 and looks set to achieve this aim despite COVID-19-related construction delays due to social distancing restrictions earlier in the year.

Market participants said Rongsheng was absent from the spot market for a couple of months and returned this week to buy the medium-sour Middle East cargoes, which led some to believe it was restocking but added that the scale of the purchase does point to some use in the new facility.

The purchase is not a sign of increased crude purchases from China for the final quarter as the nation has still to work through record imports made earlier in the year with deliveries in September coming in at a high 11.8 million b/d, up 2% from 11.2 million b/d in August and well above the 10 million b/d a year ago, according to preliminary data from the General Administration of Customs (GAC).

The petrochemical units include a 1.4 million mt/year ethylene and a 4 million mt/year paraxylene plants as well as related downstream polymer and polyester units. It also has a 600,000 mt/year propane dehydrogenation (PDH) unit.

Phase II is centered around a similar 400,000 b/d CDU as the first phase, placing ZPC in conjunction with Hengli Petrochemical as operators of the largest independent refining-cum-petrochemical complexes in China. Once completed there will be two such 800,000 b/d sites in the country.

Sentiment remains divided over the direction of European jet fuel prices ahead of winter, following market turbulence which saw fourth quarter 2020 and first quarter 2021 paper tumble between July and August before surging higher from September until early October, sources told OPIS.

Continuing low refinery runs coupled with the autumnal turnaround season has tightened supplies from across the European barrel since September, creating backwardation in naphtha and gasoline and causing middle distillate differentials to strengthen versus distillate futures, according to OPIS and Intercontinental Exchange pricing.

European jet differentials versus front-month ICE Low Sulfur Gasoil futures jumped higher in September, helped by refiners minimizing aviation fuel production as the persistence of COVID-19 stalled the recovery of the sector.

Europe, which is structurally short jet fuel and usually imports more than 20 million metric tons a year, mainly from the Middle East Gulf and India, has largely been influenced by Asia, sources told OPIS. The European market has been focused on the strengthening regrade in Singapore, the difference in price between jet and 10ppm sulfur gasoil prices.

At the start of September, the November regrade was trading at minus $5.10/bbl, with Singapore FOB jet paper trading the equivalent of around $18.50/mt below Singapore FOB 10ppm sulfur gasoil paper. By the end of the month, the November regrade had bounced higher to minus $3.08/bbl, while FOB jet paper narrowed to just $5/mt below Singapore FOB 10ppm sulfur gasoil, a contraction of $13.50/mt over the month.

"Most of the European swaps, and it has been volatile, have been trading during the Singapore market-on-close," another trader said. "People think the worst is over, and there is talk of refiners continuing to cut jet production out of the slate, and also expectations some refineries will be axed next year."

"Gasoline recovery has been strong and will receive a modest boost from seasonal demand due to the festive seasons. For diesel, the IHS Markit September Manufacturing PMI was 56.8 (4.8 points higher than August), indicating that industrial activities are recovering well, supporting diesel demand," said Kendrick Wee, IHS Markit research and analysis associate director in Singapore.

Domestic gasoline sales by the three largest state-run refiners, who together have 90% of the local market, grew 2% in September, the country"s first monthly year-on-year growth since the March COVID-19 lockdown, the sources said citing preliminary data from the sellers.

Tepid year-to-date LNG demand is seen in sluggish import volumes, which fell to around 55 million mt from January to September 2020, 4.8% lower than the same time last year, according to shipping data by IHS Markit LNG Analytics.

MIDOR is seeking one 30,000 mt (plus or minus 10%) cargo of 1% maximum sulfur gasoil for delivery to El Dekheila over October 11-13; one 30,000 mt (plus or minus 10%) cargo of 0.5% maximum sulfur gasoil for delivery over November 5-7; and one 30,000 mt (plus or minus 10%) cargo of 1% maximum sulfur gasoil for delivery over November 20-22. Bids should be submitted by September 28 and are to remain valid until October 2, according to the document.

On Wednesday, Hanwha Total Petrochemical (HTC) bought HFRN for H1 Nov. to Daesan at a discount of $5/mt or larger to Japan prices, said sources. An HTC company source declined to comment.

On Thursday, Yeochun NCC (YNCC) bought OSN (minimum 70% paraffin) for H1 Nov. at plus $4.50/mt, effectively placing the HFRN-OSN spread at $9-$10/mt, bigger than the $5-$6/mt in mid-September.

The U.K.-based Grangemouth petrochemicals plant operated by Ineos will shut down at the beginning of October, according to sources with links to the plant Tuesday.

The shutdown of the petchems facility in Scotland is planned to last between five and six weeks, those local sources say, and has been pushed back from a provisional mid-September start date.

Diesel sales by Indian Oil Corp. (IOC), Bharat Petroleum Corp. Ltd. (BPCL) and Hindustan Petroleum Corp. Ltd. (HPCL) edged up 19.7% from 1H August to 2.13 million mt, while gasoline and jet fuel rose 7.2% and 21.3% to 965,000 mt and 125,000 mt, respectively, according to data from the suppliers.

IHS Markit estimates September refinery runs at 4.1 million b/d, rising to 4.4 million b/d in October/November, Das said, adding that the forecast may be slightly on the optimistic side.

On the other hand, Basrah crude from Iraq has been losing ground in anticipation of increased supply for November after the country managed to claw back a significant portion of its over production in August and now in September, the sources said.

Aramco set in end-Aug. its September Contract Price (CP) for propane at $360/mt, unchanged from August and butane at $355/mt, up $10/mt on-month, as term discussions for next year got started. No cancellations of term cargoes were reported for September.

The October propane CP swap was assessed at $371/mt on Thursday, $11/mt above the September CP, having reached a bottom at $347/mt on Sept. 11 since the September CP was set in end-August.

According to shipping reports obtained by OPIS, 24 VLCCs have been booked on mostly three-six month TCs with one trading company having got the jump on others and managing to snap up at least four supertankers at below $30,000 per day with the cheapest at $25,000/day. The best deal on the list was for a 3+3-month booking delivered Singapore at $20,500/day, the list showed.

Saudi Aramco is on cue to slash its October official selling price (OSP) to refiners in Asia by about $1.20/bbl for its biggest Arabian Light grade after below expectations cuts in September in the face of lower spot prices and a slowdown in fuel demand, trading sources said.

The world"s largest crude oil exporter cut its Asia September OSP for Arabian Light to buyers in Asia by $0.30/bbl, half of market expectations shaped late month weakness. However, the reduction was in line with full-month average Dubai forward price structures.

“All the Middle East barrels are overpriced, Aramco has to make a big adjustment after last month,” said one trading source, admitting that the producer did not face great difficulties placing its September-loading crude even though it only made minor cuts to its OSP.

“There were some refiners who nominated very little for September after the OSP announcement but Aramco still managed to place their barrels. They have a lot of tricks, with so many different buyers,” he added.

Aramco is forecast to cut its Arabian Extra Light by a bigger $1.30-$1.40/bbl due to continued weakness in the gasoline and even naphtha markets as driving was curbed by fresh outbreaks of the coronavirus disease 2019 (COVID-19) despite seasonal peak demand in the northern hemisphere. In September, the OSP was also reduced by a larger $0.50/bbl, a pricing list showed.

Naphtha usage as petrochemical feedstock was crimped by poor aromatics margins as downstream polyester and other derivative demand started to slow down in the face of the prolonged economic downturn wreaked by COVID-19. However, consumption in China for use in olefin production remains robust, a source said.

“We expect port congestion will be alleviated in September with less fresh arrivals coming in, and that China’s crude imports will begin to see a material step-down in October and beyond once the congested cargoes get fully cleared,” according to the report.

These signs point to a challenging demand environment, which suggest Aramco is likely to heed customer requests for a bigger cut in October unlike what happened in September, the sources said.

The four refiners, PetroChina, Sinopec, China National Offshore Oil Corp (CNOOC) and Sinochem, plan to export 3.77 million mt of gasoline, diesel and jet fuel in September, according to a source with knowledge of the matter.

Diesel shipments will increase 10.9% on-month in September to 1.93 million mt, the highest since March while gasoline will drop 2.1% from August to 1.43 million mt, the data showed. Jet fuel exports, on the other hand, will shrink to 410,000 mt, almost a quarter of the 1.58 million shipped out on March.

"Gasoline exports planned for September is lower than that in August given that Chinese refiners are expecting an increase in domestic demand," the analyst added.

Singapore 10 ppm gasoil and jet fuel cargo differentials are currently at minus $0.35/bbl and minus $0.95/bbl, respectively, while 92 RON gasoline is at minus $0.10/bbl, according to trade sources.

Chinese refiners faced excess domestic supply of transportation fuels after the economy was again disrupted by COVID-19 outbreaks in July, coupled with heavy monsoon floods in various parts of China.

YNCC settled at a premium of around $7/mt to Japan naphtha price, two sources said. LG Chem concluded at plus $6-$7/mt while Korea Petrochemical Industry Co. settled at around plus $3/mt, according to several sources. Formosa Petrochemical Corp. (FPCC) bought cargoes for Oct. 2020-Sept. 2021 at plus $4-$5/mt.

These term deals were agreed with trading companies, said a buyer, adding that producers including Saudi Aramco, Abu Dhabi National Oil Co. (Adnoc) and Reliance Industries Ltd. also have trading arms.

Asia naphtha demand as a petrochemical feedstock will continue to grow as new crackers begin operations even as below-capacity refinery utilization rates in some countries squeeze supply further, they said.

Buyers currently in 2021 CFR term discussions include Hanwha Total Petrochemical for splitter grade, or heavy full range naphtha (HFRN), and Lotte Chemical Titan for light naphtha, sources said

Refinery run rates in Asia and the Middle East are expected to improve to 74% this month and reach 82% by January 2021, from below 70% in April during the depth of coronavirus disease 2019 (COVID-19) lockdowns, said April Tan, IHS Markit associate director in Singapore.

Refining margins in Asia are under tremendous pressure due to the sharp drop in fuel demand with the benchmark Singapore complex gross margin dropping to minus $3.78/bbl in May/June, according to an update by Refining NZ, which is studying the possibility of converting its refinery in New Zealand to an import terminal.

“This is not a surprise. We are working on a list of refineries in Asia that are vulnerable because of COVID-19 and this refinery keeps coming up in many of the criteria,”said Premasish Das, IHS Markit downstream research and analysis director, adding that there are sites in Japan, Australia, New Zealand and even in Singapore that face uncertain futures.

The Philippines closure will be a boon to the overall Shell system, given its mega refining complex in Singapore with a 500,000 b/d processing capacity, which will now have a new captive outlet as the unit in Tabangao was operating at around 80-85% of capacity prior to its temporary closure in May due to COVID-19, trading sources said.

“The Shell Singapore system could be supported when demand recovers next year,” said one source, adding that transportation fuels such as gasoline, jet fuel and diesel as well as bitumen will be among the products that will be shipped from the Singapore Pulau Bukom site.

Asia gasoline is set to slump with the benchmark Singapore 92 RON crack, or refining margin, on the verge of turning negative in the face of rising supply and demand recovery losing its momentum amid new coronavirus disease 2019 (COVID-19) cases and floods in India and China, traders said.

In India, where authorities have re-imposed lockdown measures, Reliance Industries Ltd (RIL) and Indian Oil Corp (IOC) will shut crude distillation units (CDUs) for maintenance works, as reported earlier.

In the interplay between components of gasoline, credit values and changing specifications, there is one other very observable trend: traders of RBOB are not willing to bet on price plunges that match historical drops tied to the higher RVP specifications that arrive in September.

In 2018, for example, RBOB futures values lost 75cts/gal between final September settlements and late November. Other years have commonly seen drops of 20-40cts/gal tied to the easier task of manufacturing high-RVP winter gasoline.

In a bid to curb the spreading COVID-19 pandemic earlier this year, governments restricted population movement. The resulting economic slump and declining oil demand prompted the funnelling of crude and refined products into onshore storage facilities. As these tank farms rapidly filled up, there was a surge in the number of tankers chartered for storing excess volumes of oil. Many such tankers were anchored off the coast of major oil ports in West Africa, the U.S. and Europe, with the Gulf of Guinea becoming a hotspot for pirate attacks, according to the AGCS report.

There was a time when hurricanes were the biggest disrupters to U.S. refining operations, but the coronavirus disease 2019 (COVID-19) pandemic has changed that.

The majority of diesel tracked loading from ports along the west coast of India initially flowed into the key regional storage tank farms in Malaysia and Singapore, but cargoes are also making their way into the spot market as demand begins to pick up across the region, according to IHS Markit analysts.

Asian petrochemical makers plan to use more liquefied petroleum gas (LPG) in August for a second straight month as gas cracking economics improved following a jump in naphtha prices due to strong downstream and gasoline demand.

The petrochemical manufacturers had planned to crack 310,000 mt in July, according to the previous poll published on June 5. They used 306,000 mt in June.

Favorable economies of propane and butane over light naphtha prompted Northeast Asian cracker operators to buy more LPG at discounted prices to naphtha.

Hanwha Total Petrochemical Corp. (HTC) bought one 22:22 lot for end-July delivery to Daesan via a tender with propane at a single-digit discount to the Far East quotes and butane at a discount of $30s/mt to the Japan naphtha quotes, according to sources.

A South Korean trader issued two term buy tenders for 23,000 mt butane per month for delivery to Yeosu over three or six month starting from September or October.

There will be more crackers coming back on stream from turnarounds in August and it should support naphtha demand," said April Tan, IHS Markit associate director in Singapore, adding that there"s a 20% limit on the use LPG as cracker feed.

Mitsubishi Chemical, Maruzen Petrochemical and Mitsui Chemicals are on track to restart their crackers over the next two weeks after completing scheduled maintenance works, as reported earlier.

Mitsubishi Chemical will crank-up its 539,000 mt/year plant in Kashima this week, while Maruzen Petrochemical will resume its 525,000 mt/year unit in Ichihara next week. Mitsui is also on track to complete maintenance at the 500,000 mt/year Osaka facility on July 20.

Asian naphtha markets strengthened with the CFR Japan price on Monday reaching a four-month high of $406.500/mt, according to OPIS data, supported by healthy petrochemical demand, tight supply and increased gasoline consumption following relaxations of lockdowns over the coronavirus disease 2019 (COVID-19).

"The economics of LPG cracking is expected to be less attractive compared to naphtha in September as naphtha prices will moderate with the increase in domestic regional supply to meet demand requirements," she said.

Methodology: OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. OPIS, a unit of IHS Markit, checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. OPIS surveys 16-20 companies a month.

Supply of all naphtha grades tightened as refiners worldwide operated at below capacity to counter the loss in fuel demand stemming from coronavirus disease 2019 (COVID-19) mobility restrictions. At the same time, resilient petrochemical demand kept Asia cracker run rates at more than 85%, widening the supply shortfall, they said.

Last week, Hindustan Petroleum Corp. Ltd. (HPCL) sold to Aramco Trading Co. at $33-$34/mt to its own formula 28,000 mt for 20-22 July loading from Vizag, up from the plus $20-$21/mt for a June 19-21 cargo.

But MR freight rates may be close to bottom because ship owners are making a loss at current rates, said Anoop Jayaraj, clean tanker broker at Fearnleys Singapore, adding that the lump sum at WS 55 for 35,000 mt would be around $429,000, or around $12/mt.

Growing buyer resistance to the naphtha price escalation is seen in the recent withdrawal of H1 and H2 Aug. purchase tenders by Hanwha Total Petrochemical, Yeochun NCC and LG Chem.

Prices of naphtha and gasoline rose on the back of easing coronavirus disease 2019 (COVID-19) lockdown measures that rekindled road transportation fuel demand, with naphtha buoyed by both stable intake as a petrochemical feedstock and its diversion into the gasoline pool as a blendstock, they said.

The aviation fuel, once a darling of the industry as they wagered on strong air travel, is now a bane as refiners sought all options to get rid of this unwanted oil product. Last September, for example, the jet fuel crack soared to above $18/bbl.

"The steps to destroy unwanted jet stream is to first blend it into diesel up to the upper limit, blend it into cracker (petrochemical) feedstock, switch to dumbbell-like crude slate...if these are not enough then a refiner may need to lower runs as a last resort," she said.

Ethane prices will be driven higher by increasing outright natural gas prices due to the loss of associated gas production and the need to drill for gas from drier fields. Demand will be flattish in 2020 before recovering through to 2025 on growing US petrochemical consumption and boosted by new export capacity to start up at the end of the year.

As crude oil prices recover, the favourability of ethane over LPG and naphtha as a petrochemical feedstock to produce ethylene will exist for US Gulf Coast crackers even with the increases in ethane prices, said Mehta. Still, there will be some periods, especially during the summer months, when LPG prices become more favourable.

Energy Transfer"s Orbit ethane export facility in the US Gulf Coast, the group"s joint venture with China"s Satellite Petrochemicals, will be in service in the fourth quarter. The export terminal will have the capacity to export 180,000 b/d alongside 800,000 bbl of refrigerated ethane storage, the group said at the conference.

Some countries such as Japan may increase gasoline imports as their refiners had cut runs due to poor margins after governments took preventive measures over the COVID-19, a Singapore-based trader said.

"The recent second wave in Beijing is definitely having an impact," said a Singapore-based analyst. "Beijing itself is going back to half-ghost town now, and other cities and provinces are imposing travel restrictions related to Beijing."

Supply of all naphtha grades tightened because of lower global refinery runs due to fuel demand loss stemming from coronavirus disease 2019 (COVID-19) mobility restrictions. At the same time, resilient petrochemical demand has kept Asia cracker run rates at more than 85% in recent months, widening the supply shortfall, they said.

In addition to reduced volumes, Middle Eastern barrels have also become heavier, some sources said. Weak gasoline and aromatics margins may have prompted refiners to blend heavier grades and possibly jet fuel into naphtha, a trade source said.

For H1 August delivery, Hanwha Total Petrochemical (HTC) and GS Caltex bought HFRN at premiums of $11-$13/mt while Korea Petrochemical Industry Co. Ltd. (KPIC) paid $13-14/mt for light naphtha with minimum 70% paraffin, as reported.

LPG"s competitiveness as a cracker feedstock has increased although the gas can only replace up to 20% of naphtha, according to the latest Asian Petrochemical Feedstock Market Outlook weekly report.

The restart of the 300,000 b/d Petronas-Saudi Aramco joint venture Pengerang Refining and Petrochemical (PRefChem) facility after an explosion was pushed back due to manpower issues leading to the sale of several million barrels of crude oil that were in floating storage, trading sources said.

The refinery also provides feedstock to an integrated petrochemical complex with a nameplate capacity of 3.3 million mt/year. The cracker has a capacity to produce 1.26 million mt/year of ethylene, 600,000 mt/year of propylene and 180,000 mt/year of butadiene, according to IHS Markit data.

Propane"s discount to CIF NWE naphtha deepened for July, ending at minus $46/t mid-week, from minus $8/t at the start of June, according to the data in the OPIS Europe LPG & Naphtha Report. Early-June bidding for CIF ARA propane by a petrochemical major in NW Europe had continually pitched buyside levels between $10 and $15/mt deeper when compared to propane/naphtha spreads at the time.

The lower premiums likely reflect shifting supply and demand fundamentals as refiners ramp up runs to meet post-coronavirus disease 2019 (COVID-19) fuel demand recovery, said April Tan, IHS Markit downstream associate director in Singapore.

Northwest Europe naphtha values strengthened against the refinery complex in April and May, with support coming from higher arbitrage flows to Asia alongside burgeoning petrochemical feedstock demand, while other refined products in Europe saw demand crumple due to the confinement measures brought about by the coronavirus 2019 disease (COVID-19).

Naphtha did not experience the same demand crushing effect COVID-19 lockdown measures had on transport fuels in April and first-half May as support came from the petrochemical sector amid discounted prices to rival gas liquids feedstocks.

Paraffinic naphtha sank to discounts of minus $18/t to parity with the flat price in April before partially recovering to the minus $7.50/t to plus $2/t band in May, with more buying interest from the petrochemical sector compared to OSN due to its higher paraffin content.

""Japanese refiners will gradually raise runs to meet recovering consumption after the government lifted the emergency state," said Matthew Chew, principal research analyst at IHS Markit in Singapore.

Indian Oil Corp. (IOC) in May raised utilization rates to 75-80% from 39% in April, as reported earlier. Bharat Petroleum Corp. Ltd. (BPCL) said it will resume full operation where possible after raising throughput to 77% of capacity as of May 31 from 63% in April.

The petrochemical sector in northwest Europe continued to cut its intake of LPG feedstock in May as propane values maintained significant premiums to rival feedstock naphtha, leading to a slash in LPG import flows from the U.S.

CIF ARA propane prices extended its two-month run holding a premium to CIF NWE naphtha, with propane/naphtha trading at +$53/mt at the start of May, down from a high of +$131/mt recorded on April 21, but still atypical going into the summer months when propane usually trades at a discount due to the lack of heating demand. By comparison, the propane/naphtha spread was minus $139/t in May 2019. A petrochemical producer with feed-flexible coastal facilities in the Netherlands and Spain made repeated propane cargo resale attempts last month.

Demand attrition for finished goods in the petrochemical chain due to coronavirus disease 2019 (COVID-19) gathered pace in May, with Dow Chemical among other producers announcing the idling of some downstream chemical units (see OPIS alert April 30, 2020).

Petrochemical operators relied more on local North Sea supply, with 81% of their May LPG intake from North Sea countries Norway and the U.K., while 11% came from the Russian Baltic region and 8% from the U.S. East Coast.

Looking ahead, LPG has come back into favor as a petrochemical feedstock as naphtha prices have rebounded harder on rising Brent crude oil values. The propane/naphtha spread tipped negative for the first time in two months to minus $6/t on May 26, and has since deepened to minus $24/t at last look, spurring a petrochemical producer to resurface seeking propane cargoes.

Asian petrochemical producers plan a modest increase of liquefied petroleum gas (LPG)cracking in July from the lower levels intended this month, while gas usage will grow further in August when demand for heating fuels in the northern hemisphere eases, according to a poll.

The petrochemical manufacturers had planned to crack 350,000 mt in June, according to the previous survey published on May 13. They used 321,000 mt in May, lower than initial plans of 357,000 mt.

"We do expect August cracking volume to increase as compared to the previous few months with the softening in LPG prices. Summer is in full swing in August so demand for LPG as heating fuel should be seasonally low during that time of the year, easing market balance," said April Tan, IHS Markit associate director in Singapore.

A petrochemical producer in Northeast Asia raised cracker runs to full in June from around 90%, given the strong market, an official at the company said.

"A rebound in ethylene markets amid an economic recovery prompted us to gradually increase the runs, although we doubted how long the recovery will continue," said the official.

Methodology: OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. OPIS, a unit of IHS Markit, checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. OPIS surveys 16-20 companies a month.

The benchmark Singapore 92 RON crack to Brent, or refining margin, gained $1.313/bbl on Wednesday to minus $0.217/bbl, the strongest since May 21 when it was at minus $0.156/bbl, according to OPIS data.

"The key is a slash in Chinese exports. Other refineries were under turnarounds and cut runs. That came when some countries needed to import more until their refineries are normalized," said a Singapore-based trader, expecting further strength in the regional gasoline markets.

Petron Singapore Trading, which buys for the Philippines market, sought up to 150,000 bbls of 87 RON and/or up to 150,000 bbls of 92 RON for loading on July 1-6 via a tender this week.

Demand recovery in Asia prompted traders to ship gasoline and its components from Europe where consumption was relatively weaker, market sources said.

Plans by the Chinese provincial Shandong government to build a mega refining-cum-petrochemical complex is unlikely to lead to a glut of oil products due to its high integration and the probable closure of several teapot plants as part of a consolidation exercise, analysts and trading sources said.

The Yulong project has been in the making for years. Last September, details emerged for an 800,000 b/d refinery to be built in two phases with the first 400,000 b/d to be integrated with two 1.5 million mt/year ethylene plants, according to the Shandong provincial and Jilin city governments.

The Yulong project will be the most sophisticated yet in the string of mega refineries that have come onstream in the past year including the 400,000 b/d each of Hengli Petrochemical and Zhejiang Petrochemical (ZPC), according to IHS Markit.

The Yulong complex is designed to convert over 60 % of a barrel of crude into petrochemical products and feedstocks through a combination of hydrocracking and intensive catalytic cracking technologies, IHS Markit said.

"If such design is carried through, China will be able to take its crude-oil-to-chemicals (COTC) achievements one big step forward from where the operating Hengli and ZPC currently stand, consolidating the country"s world leading position in the realm of refining and petrochemical integration," it said in the report.

Sharply lower demand from U.S. West Coast refiners has prompted global crude majors to cut their oil production in Alaska to their lowest since 1977, while favorable pricing economics for Alaska North Slope (ANS) could open up a unique opportunity for the medium sour crude for export to Asian markets, according to independent research firm Morningstar.

Chinese buyers paid a premium for their jet fuel cargoes against Singapore prices for the first time in more than six months in a sign of improving market fundamentals as more airlines take to the sky and production is still curtailed, trading sources said.

China Aviation Oil (CAO) awarded its latest buy tender for late-June and early-July delivery at premiums of $0.50-$1.00/bbl to Singapore prices on CFR basis, the sources said.

For example, freight on the Singapore-Hong Kong voyage for a medium-range tanker (MR) rose to as much as $1.1 million in early May, but has since tumbled to around $310,000 in June.

Shipping fixtures showed that Mitsui Energy Trading Singapore (METS) booked the Pacific Jewel to load 30,000 mt of jet fuel from South Korea on May 26 to Shanghai at an undisclosed rate.

OPIS revealed in March that a turnaround planned at the refinery for the April-June period had been postponed until September, according to sources in the area.

"Crude imports may have fallen further in May, given lower crude runs. But it may rebound from June as refiners will raise throughput in line with demand recovery," said Matthew Chew, principal researcher at IHS Markit in Singapore.

Nayara Energy restarted a 110,000 b/d unit at Vadinar in late April after a over two-week closure, Bharat Petroleum Corp. Ltd resumed operations at its 100,000 b/d crude unit in Kochi this week following a three-week shutdown, while Mangalore Refinery & Petrochemicals Ltd also did the same after works at a 144,000 b/d unit for about a month, the report showed.

The furious pace of narrowing crude spreads prompted some to think the WTI market will flip to backwardation. According to BofA, backwardation has typically occurred as prices hit $55-60/bbl in the past five years. "With spare capacity so high, we now believe that backwardation could occur at $40-45/bbl," the bank said.

Overall oil consumption in China is forecast to contract by more than 1 million b/d in 2020 from a year ago due mainly to the drag in transport fuels while demand for petrochemical feedstocks, including naphtha and liquefied petroleum gas (LPG), are expected to post modest growth, the IHS report showed.

Fuel demand is already picking up in major consumers such as the United States, India and Germany which have loosened social distancing rules while others including Indonesia, Malaysia and Singapore still have strict measures, market sources said.

Looking even further into the future, the panelists compared the COVID-19 demand dip to losses the industry could suffer if electric vehicles (EVs) are widely adopted.

Saigon Petro has a tender for up to 10,000 mt for either July 1-5 delivery, or June 24-July 2 loading from either Singapore, Thailand, Malaysia, or South Korea, according to a document.

Nghi Son Refinery and Petrochemical (NSRP), for example, will not export any spot diesel cargoes in May and June, according to sources with knowledge of the matter.

Like other convenience-fuel retailers, Couche-Tard has pulled forward certain technologies that could help with social distancing during the pandemic as well as serve customers in the future. The company is also tweaking its inventory based on changing consumer purchasing habits. And it has adopted new policies to protect customers and employees.

As essential businesses, c-stores have adopted measures to protect employees from exposure to the pandemic and to reward them for their efforts to keep stores cleaned and well-stocked during the crisis. Couche-Tard"s Emergency Appreciation Pay Premium of $2.50/hour in North America for hourly workers in stores and distribution centers is in line with the $1/hour-$3/hour other c-stores have said they are paying. For North American workers, the company also set up an Employee Assistance Plan during the pandemic and an Emergency Sick Care Plan for hourly workers that includes a bank of sick pay and a pay continuation benefit for employees diagnosed with the virus or placed under mandatory quarantine. The company also provides access to virtual healthcare for hourly employees in the United States.

The front-month July-August Globex Brent contango narrowed to $0.18/bbl at the Singapore 4:30 pm close on Tuesday compared with a whopping minus $3.68/bbl for the June-July spread a month ago on April 17.

Citi believes that if Brent is priced between $30-$35/bbl at the time of the conclave, they may keep the OPEC+ cuts in place through at least July and even September. August Brent, which will represent the prompt contract when delegates gathered, closed under $30 bbl Wednesday. Uncertainty is expressed as to whether planned tranches of production increases will follow the schedule outlined in the April 2020 agreement.

The greatest uncertainty, however, is attached to the U.S., which Citi describes as the "largest and only true swing producer." U.S. crude production clearly peaked at 13.1-million b/d in March, and the bank sees a September trough of around 9.6-million b/d, resulting in a total decline of 3.5-million b/d.

While many petrochemical markets have been affected by demand that dropped rapidly amid quarantines around the world related to the coronavirus disease 2019 (COVID-19), toluene has been hit particularly hard.

Sales of marine fuels in Singapore, the world"s largest bunkering port, rose in April from a year ago in contrast to the demand decimation seen on other transportation fuels such as gasoline, diesel and jet fuel due to coronavirus disease 2019 (COVID-19) lock down measures across the world.

Fuel sales in April rose a surprising 11% to 4.11 million mt from 3.71 million mt a year ago but was down slightly from 4.32 million mt in March, according to preliminary data from the Maritime Port Authority of Singapore (MPA).

Singapore flagged shipping tonnage increased to 96,838,000 gross ton in April 2020 from 93,926,000 gross ton in April 2019, data from MPA showed. The April marine fuel sales volume is also well above the 3.95 million mt monthly average chalked up last year.

However, month-on-month the dip is clearly reflective of COVID-19, which has curbed global trade. The number of vessels that visited Singapore for bunkering dropped to 3,202 from 3,557 in March, MPA data showed.

The Purchasing Managers" Indexes (PMI) across Southeast Asia slumped below 50, the dividing line between expansion and contraction, with Singapore down at 44.7 in April from 45.4 in March, according to data from IHS Markit. China, the world"s second-biggest economy also registered a PMI contraction of 49.4 in April from 50.1 in March.

"Typically distillate blending falls into the 100 CST grade, since it is a maximum specification, while those that are produced from residue steams will be mostly in the 380 CST grade, thus leaving very little supply of 180 CST," said Matthew Chew, principal oil analyst at IHS Markit in Singapore.

Delivered LSFO bunker price in Singapore averaged at $239.19/mt in April, down from $317.55/mt in March, according to data from OPIS, a unit of IHS Markit.

LPG usage for petrochemical production in June is set to decline 2% on-month to 350,000 mt, according to an OPIS poll completed on May 11. Revised figures show that in May, gas cracking volume is to fall to 357,000 mt from 436,000 mt in April, according to the survey.

The trend of reduced LPG usage, however, may reverse in summer when demand for the heating fuel usually declines and as naphtha prices rebound in line with rising crude markets, said Matthew Chew, principal researcher at IHS Markit in Singapore.

Maruzen Petrochemical also idled its 525,000 mt/year cracker in Ichihara on May 11 for scheduled turnaround expected to last two months, according to a company source.

Some petrochemical makers in Asia maintained lowered runs on expectations that downstream demand may weaken again with the COVID-19 hurting the global economy. The Asian Manufacturing PMI, compiled by IHS Markit, fell to 43.9 in April, the lowest since March 2009, from 48.3 in March, indicating a deterioration in regional business conditions.

"We are considering further run cut, even probably to around 80%," said the buyer at a petrochemical manufacturer in Northeast Asia, adding their cracker has been operating at around 90%.

Methodology: IHS Markit OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. IHS Markit OPIS checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. IHS Markit OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. IHS Markit OPIS surveys 16-20 companies a month.

"China"s May exports would be around half of April as export margins are weak while domestic margins are firm," said a Singapore-based trader, while declining to comment on exact volumes.

A Singapore-based analyst said 92 RON margins in China based on domestic wholesale prices were estimated at around $11/bbl. In contrast, Singapore 92 RON crack was negative at a minus $0.582/bbl as of May 11, according to IHS Markit OPIS data.

Regional demand also showed signs of rebound with other countries such as South Korea and India loosening similar curbs. The Singapore 92 RON crack on May 11 was still far better than minus $12.986/bbl reached on April 14, the lowest on IHS Markit OPIS data going back to July 2014.

China"s refiners, however, will have to increase exports eventually as there was little room for more growth in domestic consumption and inventories will increase on higher crude runs, the Singapore-based analyst said.

Over in the U.S., the biggest number of cancellations of long-term cargoes seen in the past few weeks more than highlight current weak fundamentals. Offtakers have opted to forgo more than 20 June-loading cargoes from U.S. liquefaction plants, even though they still had to hand over an above-$2/MMBtu tolling fee.

Meanwhile, an increase in global demand poses its own threats. Producers would be tempted to increase output, drowning any price recovery in a wave of new oil crashing, Burkhard said.

Gasoline demand from June through September last year averaged 9.595 million b/d. If the rebound took consumption back to 75% of normal, it would imply a domestic demand figure of less than 7.2 million b/d. If social distancing and fear of the coronavirus disease 2019 (COVID 19) were significantly eased and the recovery number was 80%, demand of 7.676 million b/d would result. Only if demand destruction eased to, say, 10% would the U.S. again require 9 million b/d of motor fuel.

The pandemic and social-distancing measures have prompted sharp falls in public transport use, said Andersson, resulting in those unable to work from home opting to travel by car.

Domestic consumption for diesel was hit hard due to its duality of uses in both industry and transportation sectors. It fell 21% from the previous month to 5.651 million mt, the lowest since September 2016, according to the PPAC data.

In northwest Europe, LPG cargo trade over the course of April began to react to the coronavirus disease 2019 (COVID-19) related lockdowns across Europe and resulting fall in demand for products and goods. The effects on LPG were latterly felt the most in the petrochemical feedstocks sector and followed an abrupt fall in demand for distillates, mainly gasoline.

Overall LPG trade was down by an estimated 23% compared to March, with intake as petrochemical feedstock down by 19% at 515 kt. Despite the intake fall, the level was considered fairly robust, as the same period saw more severe demand falls in other products sectors such as gasoline and naphtha.

"The netback model starts with a depressed Singapore product price and then subtracts a soaring freight rate to derive an FOB Arab Gulf (AG) price," said John Driscoll, a long-time oil trader and analyst who now lectures on energy risk management at the Singapore Management University, adding that the question now is how low the netback value may go.

Price assessments for millions of barrels of Middle East jet fuel and gasoil are done by way of netbacks, that is deducting a freight element from established FOB Singapore prices. This would have been fine, if that was the natural trade route for the AG fuels market.

"The relevance of the Singapore netback model has declined while new Gulf refining capacity came onstream; hence, standalone FOB (AG) benchmarks for the Middle East make more sense and better reflect values in multiple export markets," said Driscoll.

For example, on April 22 jet fuel prices fell to a low of $14.86/bbl in Singapore, which brought it dangerously close to the freight costs used to calculate the netback AG price, which on that day slumped to $8.40/bbl, according to data from IHS Markit OPIS.

The new front-month June contract lost $4.16/bbl, or 24.6%, to settle at $12.78/bbl on Monday and last traded down $1.06/bbl to $11.72/bbl at around 6:40 pm Singapore time. The market took a beating after U.S. Oil Fund, the largest oil exchange product, said it would shift its holdings to later-dated contracts and sell its June positions.

A recent case in point is Alimentation Couche-Tard Inc., which shelved its widely reported $8.6 billion purchase of Caltex Australia Ltd. In a statement, Couche-Tard confirmed that due diligence for the transaction has been "substantially completed" and Caltex is a "strong strategic fit for Couche-Tard and an important component of its Asia Pacific expansion strategy."

The cost of jet fuel loaded FOB in the Middle Gulf plummeted to $8.45/bbl ($66.67/metric ton) this Wednesday, OPIS Asia report shows, compared to $82.85/bbl ($653.7/ton) same time last year. OPIS calculates the cost of FOB Middle East Gulf jet fuel as a freight netback from FOB Singapore quotes.

Gasoil demand picked up with many enterprises resuming logistical operations and spring ploughing starting in some regions. Falling gasoline prices also prompted more drivers to use their cars.

The tightening of state budgets is not being lost among leadership, with recent local reports indicating that Michigan is considering layoffs of non-essential workers. The Michigan State Budget Office estimates that economic impact from COVID-19 could leave a $1 billion-$3 billion revenue gap for the state during the fiscal year, which runs through the end of September.

The renowned founder of Singapore oil trading firm Hin Leong Trading (HLT), Lim Oon Kuin, has stepped down as the company"s director and managing director, according to a court filing that also suggested he hid $800 million in derivatives trading losses.

The affidavit, dated 17 April and seen by OPIS IHS Markit, was submitted by Lim Oon Kuin himself to support an application to the Singapore high court for a six-month debt moratorium for beleaguered HLT. The resignation was to be effective immediately following the filing of the application. Lim would have "no executive or management function" in the company.

HLT"s total liabilities are about $4.05 billion while its assets are valued at $714 million as of April 9, according to the affidavit. HLT, one of Asia"s biggest independent oil traders, had sought advisories from lawyers, Rajah and Tann, and consultants PwC Singapore amid a credit freeze by its lenders, OPIS IHS Markit reported last week.

"Some of these vessels were booked...before the crisis escalated," one source said, adding that others may have opted to sail to the U.S. as there was ullage left.

A range of factors is taken into account when calculating the costs of storage, at onshore farms and onboard vessels, but with the structure so wide, floating storage for the prompter months is a viable option, sources told OPIS.

IHS Markit, under its base scenario with a slim U-shaped recovery, expects gasoline demand to begin recovering in September to normal levels with a YOY drop in demand in April and May of around 35%. Under this projection, Mexico"s gasoline demand in 2021 could be between 760,000 and 780,000 b/d, slightly under 2019 reported levels.

Several U.S. companies, including ExxonMobil, attempted earlier this month to insert clauses in their contracts that would negate the possibility of sales prices below zero.

"The market is quite disappointed. Brent came off a bit this morning, the 9.7 million b/d output cut is not enough to offset demand loss. It will only try to delay tank top situation," said one Singapore-based trading source, adding that Saudi Arabia pumped a lot this month and these cargoes will need to go into storage first before a clearer picture of market fundamentals emerges.

"This is a welcome step, but in 2Q the cut is a bit low, where we are forecasting demand reduction of 20 million b/d," said Premasish Das, IHS Markit downstream research and analysis director in Singapore. "A lot depends on the big unknown, "how the demand recovery takes place" and also how the stakeholders of this production cut comply."

In addition, the OSN first cycle/third cycle contango widened to $7.00/mt on April 7. It was the widest since a similar $7.00/mt contango in September 2016, suggesting weak supply/demand conditions for the second half May cycle.

Since gasoline demand has tumbled, naphtha is not going into the gasoline blending pool, said a Singapore-based market source, adding that naphtha barrels were being pushed to Asia for petrochemical use.

The fixture showed that the vessel might make a transatlantic voyage, or head to Singapore or Japan. MINT shows the tanker left Suape on April 3 and is now anchored off Salvador. There was no indication of its next destination.

Heavy maintenance work at the Petroineos-operated 210,000-b/d Grangemouth refinery has been postponed, while sources say that the April-June turnaround scheduled for the Phillips 66-operated 205,000-b/d Immingham refinery has been pushed back to September.

Asian petrochemical manufacturers plan to crack less liquefied petroleum gas (LPG) in May for a second straight month, but this is unlikely to support naphtha consumption much with the coronavirus disease 2019 (COVID-19) denting downstream demand.

LPG usage for petrochemical production in May is set to fall 6.8% on-month to 449,000 mt, according to an IHS Markit OPIS completed on April 7. This month, gas cracking volume is to decline 7.7% to a revised 482,000 mt from 522,000 mt in March, according to the poll.

Petrochemical producers typically find it more attractive to crack naphtha instead of LPG when the ratio rises above 90%. But that"s not the case now as the COVID-19 hit the global economy and consumption, analysts and traders said.

"In theory, lower LPG cracking volume may support naphtha consumption, but overall petrochemical demand is too weak to see solid naphtha demand," said Matthew Chew, principal researcher at IHS Markit in Singapore.

Naphtha prices tumbled on poor gasoline and petrochemical demand with the CFR Japan naphtha falling on April 1 to $165.750/mt, the lowest on the IHS Markit OPIS data going back to July 2014.

"Cracking margins are good in numbers, but we cannot raise runs due to the slowing economy," said a feedstock procurement manager at a petrochemical producer in Northeast Asia, which has been operating its cracker at 90% since January.

Methodology: IHS Markit OPIS collects Asian petrochemical companies" plans for the current month and the next month, as well as actual cracking volume in the previous month. IHS Markit OPIS checks if any manufacturers revise their plans for the current month and if any manufacturers crack more or less than initial plans in the previous month. IHS Markit OPIS contacts feedstock procurement officers of each companies for the survey by phone, email or messengers in the last week of previous month or the first week of the current month. IHS Markit OPIS surveys 16-20 companies a month.

OPIS revealed in September that a process column was already under construction in India after being commissioned by Fluor, FAST"s EPC contractor, even though planning permission for FAST had not yet been obtained from British local government authorities. That permission was subsequently granted by New Forest District Council.

Oil product exports in the first 25 days of March rose 33.8% in terms of volume and petrochemical shipments grew 17.5%, although overseas sales for the whole month in terms of value fell 5.9% and 9%, respectively, in line with the price crash seen across the energy complex, data from the ministry showed.

Whiting Petroleum Corp. on Wednesday announced it was seeking Chapter 11 bankruptcy protection, making it the first major U.S. shale producer to become a casualty in the ongoing price war between Russia and Saudi Arabia that has seen a historic drop in energy prices.

The drop in energy prices prompted several shale producers to announce cuts in capital spending in an effort to firm up balance sheets for the tough times ahead. Whiting on March 16 had announced $185 million in cuts to planned capital spending.

--Phillips 66 has confirmed run cuts in its refining system as part of actions taken in response to the challenging business environment. OPIS has learned that the refiner has pushed back a turnaround scheduled for April-June to September because of the pandemic.

--The U.K."s largest oil refinery, the 270,000-b/d Fawley plant, has cut runs but remains online after discussions between operator ExxonMobil and British government officials. ExxonMobil cut refinery runs at Fawley by around 70,000-b/d at the beginning of the week after taking the Pipestil 1 unit offline. Fawley is a critical part of the U.K."s energy infrastructure because of its links to the nation"s largest cities and airports. Eighty-five percent of the refinery"s output is pumped through underground pipelines as far away as London, Birmingham and Bristol. Pipelines connect the refinery to Heathrow and Gatwick airports. Diesel represents 29% of the refinery"s output, while gasoline, jet and petrochemical feedstocks make up 28%, 11% and 9% of output.

As for full-plant temporary shutdowns due to COVID-19, North America has its first in North Atlantic Refining Ltd."s 130,000-b/d Come by Chance refinery in Newfoundland. The refinery, which supplies cargoes of gasoline and diesel to the U.S. East Coast and sells distillate to European buyers, will maintain a reduced staffing crew on site to maintain equipment.

Glencore, for example, has the LR2 Eternity and STI Carnaby for 120-180 days storage off Singapore at $44,000/day and $40,000/day, respectively, the list showed. BP, on its part booked the BW Larissa and Celcius Everett for 60-120 days storage at $50,000/day and $46,700/day, according to the fixture, without specifying a location.

Even with the higher floating storage costs, traders can still make a profit by storing cargoes for sale in the future due to the wide contango. The Singapore three-month April to July jet fuel contango was $6.81/bbl, while that of gasoline was $4.15/bbl and diesel at $2.79/bbl, according to broker data on Monday.

"The impact will also be quite dramatic as we saw in China. We will see a significant drop in oil demand in April, easily about 45-50% (year-on-year) drop in absolute demand of transportation fuels," said Premasish Das, IHS Markit research and analysis director in Singapore.

"Vehicles/trains/air cargo/ship cargo carrying goods for trade or essential goods and supplies are exempted from this prohibition along with their crew, driver, helper, cleaner etc. subject to their thorough screening by medical staff for COVID-19," the Ministry of Home Affairs clarified a Shipping Ministry order in a note to port operators.

Among refiners that are now considering cuts include Taiwan"s CPC Corp. while others such as Shell in Singapore, SK Energy in South Korea and Trans Pacific Petrochemical Indotama (TPPI) have scheduled maintenance shutdowns, according to industry sources.

Formosa Petrochemical (FPCC) already closed an 84,000 b/d residue fluid catalytic cracking (RFCC), a 180,000 b/d crude distillation unit (CDU) and an 85,000 b/d residue desulfurization unit (RDS) for maintenance works earlier this month, as reported earlier.

"Jet cracks are expected to remain under severe pressure in the second quarter and potentially falling to near zero. Airlines have announced capacity cuts of up of 90% as overseas travel comes to a halt with various restrictions and quarantine measures in place," said Matthew Chew, IHS Markit downstream principal analyst in Singapore.

Shipping fixtures this week continue to show a slew of booking to both Europe and USWC. Petroineos chartered the STI Lobelia to pick up 90,000 mt from Yangpu for delivery to Singapore or Europe (UKC) at a cost of $1.3 million and $3.7 million, respectively.

Singapore Airlines announced a 50% cut to its scheduled capacity up to the end of April, while others such as Garuda Indonesia and Cathay Pacific have cut capacity by as much as 70% and 77%, respectively.

Asian petrochemical producers may consume less liquefied petroleum gas (LPG) than originally planned in the coming months as cracking economics shift in favor towards napht