rongsheng petrochemical singapore address pricelist

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RONGSHENG PETROCHEMICAL (SINGAPORE) PTE. LTD. is a Singapore PRIVATE COMPANY LIMITED BY SHARES. The company was incorporated on 28 Jan 2015, which is 8.0 years ago. The address of the Business"s registered office is MARINA BAY FINANCIAL CENTRE, 12 MARINA BOULEVARD, #31-02, Postal 018982. The Business current operating status is Live Company. The Business"s principal activity is WHOLESALE OF CHEMICALS AND CHEMICAL PRODUCTS N.E.C.. (eg GLOBAL TRADING OF GAS & OIL, REFINERY PRODUCTS AND PETROCHEMICAL.). The company"s paid-up capital is USD 96,000,000. It was named as ASIA RONGSHENG PTE. LTD.. The company UEN is 201502714M, registered with ACRA on 2015-02-03.

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 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 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.

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.

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.

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.

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.

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.

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.

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.

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.

Lower refinery utilization and the COVID-inspired drop in U.S. demand have also dismissed octane worries for the moment. The best means of addressing tough Tier 3 sulfur standards this year would have required running catalytic reformers at very high rates, and that might have limited output of high- octane components. But the lowest refinery runs of the 21st century have left plenty of spare capacity in refining complexes and kept octane spreads in check.

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.

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.

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).

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.

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 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.

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.

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.

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.

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 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.

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.

"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.

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.

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.

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.

The investment house is generally confident that OPEC+ has addressed the glut, portending more reasonable balances down the road. News of Gulf Cooperation Council countries slashing an additional 1.18-million b/d of crude helps and it now appears that OPEC+ countries are considering longer extension terms for the more than 9-million b/d of production already cut.

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.

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.

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.

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.

"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."

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.

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.

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.

--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.

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.

You have also seen how the most powerful nations have become helpless in the face of this pandemic," Prime Minister Narendra Modi said in a live televised address on Tuesday. "This lockdown will be for 21 days. This is to save India, save each citizen and save your family. Do not step outside your house."

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.

"There will be government intervention to address collapsing sectors of the economy, but there is no historical precedent to guide such efforts amid such an enormous decline in demand. Global repercussions of the COVID-19 pandemic will be profound and cause ripples that are not yet visible or imagined," IHS Markit said.

Hearings originally scheduled for next week to address Saskatchewan and Ontario"s legal challenges to Canada"s federal carbon backstop pricing program have been tentatively rescheduled to June 2020, according to a statement from the Chief Justice of Canada this week.

"The Supreme Court of Canada is closely monitoring the advice of public health officials with respect to COVID-19 and is working with various stakeholders in the justice system to address the issues arising out of this exceptional situation," the Chief Justice"s statement said.

Asian petrochemical producers may consume less liquefied petroleum gas (LPG) than originally planned in the coming months as cracking economics shift in favor towards naphtha, market sources said .

"Naphtha prices are so depressed now because of the low crude oil prices so there will be more naphtha cracking," said Matthew Chew, principal researcher at IHS Markit in Singapore.

"Naphtha looks more economical than LPG right now as the propane/naphtha ratio is high," said a senior feedstock procurement official at a Northeast Asian petrochemical company that had participated in the cracking survey.

Petrochemical producers typically find it more attractive to crack LPG instead of naphtha when the ratio dips below 0.90. The ratio surged to 1.039 on Monday, the highest since Oct. 30 2017, IHS Markit OPIS data showed.

Cracker operators meanwhile have been cutting run rates in face of weak downstream demand. Taiwanese private sector refiner Formosa Petrochemical Corp (FPCC) reduced the average run rates of its three naphtha crackers in Mailiao to around 90% from March, down from around 99% to 100% in January and February respectively, a company official said.

South Korea"s LG Chem reduced run rates at its crackers in Daesan and Yeosu from March 1, while YNCC is planning to cut the run rate for its No.2 cracker in Yeosu for 2-3 weeks, according to IHS Markit"s Asia Light Olefins Weekly published on March 6. Fellow South Korean petrochemical producer shut a 1.1 million mt/year cracker after an explosion on March 4.

Japan"s Maruzen Petrochemical and Keiyo Ethylene were due to cut run rates in March, while Mitsui Chemicals reduced run rates in late February, according to industry sources.

"The probability of downside risk for petrochemical products, which already have been impacted by COVID-19, has increased further after the plunge in oil prices," IHS Markit said in a report on March 10.

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.

WS52.41 on March 10. The freight rate for the Middle East to Singapore route rose by 22.42 points to WS78.42 while that for the Middle East to China route rose by 21.84 points to WS78.42.

--Petrochemical companies in Japan and South Korea have scaled back their naphtha crackers amid COVID-19 concerns. This has caused a potential market for U.S. propane to dry up.

May ICE Brent futures were at $33.90/bbl as of 9:55 am Singapore time, over 36% lower than Singapore"s close of $49.08/bl last Friday. The last time crude futures fell by over 30% between trading sessions was at the start of the first Gulf War in January 1991, according to data from the Energy Information Administration.

April Singapore 92 RON gasoline swaps tumbled 26% to $39.39/bbl Monday morning in Asia from Friday"s close, while its crack spread gained 1.5% to $4.81/bbl.

April Singapore jet fuel prices and 10 ppm sulfur gasoil slumped 24% and 23% to $42.32/bbl and $44.55/bbl, respectively but the crack spread rose by $3.25/bl and $3.21/bl to $10.00/bbl and $12.23/bbl respectively.

May Singapore 0.5% sulfur fuel oil swaps fell by a similar magnitude of 23% to $293.50/mt during morning trading while its crack spread rose by almost $2/bbl to $8.77/bbl.

SINGAPORE (Reuters) - Private Chinese oil refiner and petrochemical manufacturers Hengli Petrochemical Corp and Rongsheng Petrochemical Corp have each hired a new executive for its Singapore trading desk, company officials said on Wednesday.

Hengli Petrochemical International Pte Ltd, the trading unit for Hengli Petrochemical Co. Ltd, hired James Zhang, formerly Head of Energy, Asia, at ICBC Standard Bank, as its deputy president to drive the company’s strategy and its day-to-day operations, a company spokesman said.

Separately, Zhu Yanyu, previously a veteran oil products trading manager at state-owned oil and gas company PetroChina, started in June at Rongsheng Petrochemical (Singapore) Pte Ltd as a deputy general manager in charge of refined products trading, said two company officials.

The Singapore operation is the international trading unit for Rongsheng Petrochemical Corp, which is a key stakeholder in Zhejiang Petrochemical Corp (ZPC), one of China’s largest private refiners which operates a 400,000 barrels per day refinery in east China’s Zhoushan.

Crude Oil market in the North American region experienced the severe downfall in supplies as extreme freeze weather conditions in Texas and nearby of US Gulf coast area, resulting in regional production cuts by the Crude Oil extractors. The demand showed mixed sentiments due to the shutdown of major US Gulf Coast based refineries including those of Dow Chemicals, ExxonMobil, and force majeures on various downstream petrochemical units in mid-February. Motiva Enterprises announced to shut its 607,000 bpd Port Arthur, Texas, refinery, the largest in the United States after Valero Energy Corp and Total SE declared to shut their 335,000 and 225,000 bpd plants in Texas, due to the cold snap. Colonial Pipeline Co, the largest oil products pipeline in the US, reported no significant impact due to storm in its operations. Storm effects stalled energy distribution hampered sending ripples to the price. WTI Crude jumped to USD 66 per barrel on 11th March, to its several months high in a single day.

The crude oil market remained resolutely high in the APAC region, amidst major consumers seeking more barrels with the demand turning robust as various downstream industries restarted again after a turnaround. Refiners maintained their key focus on the Chinese and Indian spot demand as operations ramp up turning fuel demand high. Indian Oil Corp. (IOCL) issued a tender in mid-March seeking sweet crude from West Africa and other regions while China"s Rongsheng closed a buy tender for purchase of nearly 3 million barrels of crude from Oman, Murban crude and Upper Zakum in mid-March. Crude futures rose as OPEC+ supplies remained tight with demand expected to increase as global economic activity picks up.