FUJAIRAH DATA: stocks of petroleum products decline in all areas, light distillates near record low
Sri Lanka gears up for first naphtha shipment: Kpler
South Korea may need more naphtha for new crackers
Light distillates failed to hit October 2020 record low of 4.198 million barrels
Inventories of petroleum products in Fujairah on the UAE’s east coast fell to their lowest level in two weeks as light distillates fell to their lowest since October 2020 record low due to demand growth of naphtha in Asia.
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Total stock was 22.335 million barrels as of June 7, down 5.7% from the previous week and the lowest since May 24, according to data from the Fujairah Oil Industry Zone provided exclusively on June 9 at S&P Global Platts. All categories saw declines, with light distillates such as gasoline and naphtha falling 4.7% to 4.978 million barrels, the lowest since October 26, 2020, when they hit a record high of 4.198 million barrels. Middle and heavy distillates also fell to two-week lows.
Fujairah’s naphtha exports were 69,000 bpd in May, the highest monthly total since February 2019, according to commodity data company Kpler. Shipments to Japan averaged a record 29,500 bpd in May and Sri Lanka was due to receive its first shipment of naphtha from Fujairah, according to Kpler. Taiwan, South Korea and Malaysia also absorbed the raw material last month. Naphtha is used as a raw material for petrochemicals and in gasoline blending.
Fujairah’s naphtha exports rose sharply by 34.5% from April, mainly due to a 59.46% month-on-month increase in shipments to Japan as the country’s domestic supply was below maintenance of refineries in a context of high rates of steam crackers due to positive margins. Idemitsu Kosan, Japan’s second-largest refiner, shut down its 190,000 bpd crude distillation unit at the Chiba refinery from April 28 to June 6.
Export volumes could remain firm as Japan’s largest refiner, ENEOS, plans to shut down its only CDU at its 145,000 bpd refinery in Sendai for scheduled maintenance from early June to mid-July. In addition, the overall demand for naphtha as a petrochemical feedstock was firm, as not only are the olefin margins positive, but also new steam cracker units are expected to be put into operation from mid-June, it said. from market sources.
The key deviation of ethylene CFR in Northeast Asia from the C + F Japan benchmark naphtha cargo was last valued at $ 330.125 / mt at the June 8 Asian close, and is remained above the typical break-even point for integrated growers of $ 250 / mt since May 12, 2021, Platts data shown.
In South Korea, the start-up of the new LG Chem cracker is scheduled for June 14 and 15 and will have an ethylene production capacity of 800,000 t / year; GS Caltex’s new mixed-feed cracker is scheduled to start on June 20, with a capacity of 700,000 t / year of ethylene, Platts reported earlier.
The new crackers from LG Chem and GS Caltex will take time to achieve 100% duty rates. In addition, it is not clear whether the two crackers would use naphtha as the sole raw material: LG Chem’s new cracker can convert up to 40% of its raw material requirements into LPG, while that of GS Caltex can converting up to 30% of its raw material to LPG.
Inventories of middle distillates such as jet fuel and diesel fell to 3.484 million barrels as of June 7, down 8.8% from the previous week, while heavy distillates such as fuels used in production electricity and marine bunkers fell 5.3% to 13.873 million barrels.