OPIS Asia Naphtha and LPG Report

A Daily Report on Asia Naphtha, LPG and Gasoline Markets, plus News and Commentaries 20 July 2020

NAPHTHA
.

• H1 Sept./H1 Oct. OSN backwardation stable at near 3- MARKET ($/mt) LOW HIGH MEAN CHANGE PREM/DISC
week low
CFR Japan 375.38 376.38 375.875 -2.250 14.500
• End-users in wait-and-see after recent softening of
FOB Arab Gulf LR1 360.86 361.86 361.363 -2.169 22.250
sentiment
MARKET ($/bbl) LOW HIGH MEAN CHANGE PREM/DISC
• Japan June ethylene output down 4.5% on-month amid
cracker maintenance FOB Singapore 41.25 41.35 41.297 -0.250 11.000

LPG ($/mt)
.

• KPC issues 33:11 CFR sell tender for Aug. 26-Sept. 6 Japan
MARKET LOW HIGH MEAN CHANGE PREM/DISC
arrival
CFR Japan Propane 349.50 350.50 350.000 4.000 --
• South China importer buys 22:22 2H Aug. loading FOB
U.S., to use new VLGC CFR South China Propane 362.50 363.50 363.000 26.000 --

• Japan imports 573kt LPG in June, down 32% on-year FOB Arab Gulf Propane 343.50 344.50 344.000 8.000 -35.000

GASOLINE ($/bbl)
.

• Gasoline cracks, spot assessments down

SINGAPORE LOW HIGH MEAN CHANGE PREM/DISC
• Kenya seeks more 93 RON for August-September
92-RON 44.15 44.25 44.199 -0.467 0.041
• FPCC to cap runs at 70% after fire; impact on Asia gasoline
95-RON 45.69 45.79 45.737 -0.586 0.042
to be limited
97-RON 46.64 46.74 46.687 -1.263 --

Market Overview

Market News Headlines

.
16:30 SINGAPORE BRENT MARKER ($/bbl)
MONTH PRICE CHANGE
• Taiwan Formosa to Cap Refinery Runs at 70% for Several Months After Fire
September 42.85 -0.24
• India OMPL to Revert to Aromatics Mode in August, Halt Reformate Exports
October 43.01 -0.23
• KCS Sees Fuel Shipments Into Mexico Recover to Pre-COVID-19 Levels
. November 43.28 -0.16

Key Prices

Key Prices ($/mt) TABLE OF CONTENTS

NWE NAPHTHA
430.910
JAPAN LPG Market Overview...........................................1
NWE NAPHTHA 441.729
367.250 Key Prices......................................................1
JAPAN NAPHTHA
CFR JAPAN PROPANE
471.729 Naphtha Commentary, Prices......................2
350.000
CFR JAPAN NAPHTHA LPG Commentary, Prices..............................3
375.875 Cracking Survey............................................4
Arbitrage Economics.....................................4
Freight...........................................................4
Gasoline Commentary, Prices......................5
Tenders..........................................................6
USG LPG AG LPG Shipping Fixtures..........................................6
498.330 418.729
MB NON-TET
USG NAPHTHAPROPANE FOB AG PROPANE Refinery Maintenance...................................6
AG NAPHTHA
251.383
508.720 344.000
448.729 SING 92 RON ($/bbl) Cracker/PDH Maintenance...........................6
USG NAPHTHA (40N+A) FOB AG NAPHTHA 418.729
361.363 FOB SING 92R($/bbl) Market News.................................................7
346.587 SING NAPHTHA
44.199
448.729
FOB SING NAPHTHA
41.297

© Copyright by Oil Price Information Service (OPIS), an IHS Markit company, 2099 Gaither Road, 5th Floor, Rockville, MD 20850-4000. OPIS Asia Naphtha and LPG Report is published each
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OPIS ASIA NAPHTHA & LPG REPORT

Naphtha Commentary, Prices

NAPHTHA CFR JAPAN OPEN SPEC NAPHTHA ($/mt)

LAYCAN LOW HIGH MEAN CHANGE
Naphtha's inter-month backwardation steady near H1 Sep 384.00 385.00 384.500 -2.250
recent three-week low H2 Sep 378.00 379.00 378.500 -2.250

. Asia naphtha prices fell on Monday after crude eased, while the H1 Oct 372.75 373.75 373.250 -2.250
inter-month backwardation remained near a three-week low
recorded last week. TODAY’S OUTRIGHT SPOT NAPHTHA PRICES ($/mt)
MARKET LOW HIGH MEAN CHANGE PREM/DISC
The CFR Japan price fell $2.250/mt to $375.875/mt, while the open
CFR Japan 375.38 376.38 375.875 -2.250 14.500
specification naphtha (OSN) H1 Sept. to H1 Oct. backwardation
CFR Korea (Daesan-basis) 373.38 374.38 373.875 -2.250 12.500
was steady at $11.250/mt. Last Thursday, the spread shrank to
FOB Singapore ($/bbl) 41.25 41.35 41.297 -0.250 11.000
$11.000/mt, which was the narrowest since $10.500/mt on June 22.
FOB Arab Gulf LR1 360.86 361.86 361.363 -2.169 22.250

End-users are taking a wait-and-see stance, hoping that prices will FOB Arab Gulf LR2 359.57 360.57 360.067 -2.096 26.000
come down further after the CFR market weakened over the past
few trading sessions, a market source said.

CFR JAPAN CLOSE NAPHTHA SWAP ($/mt)

Expectations that August arbitrage flows would be higher than
MONTH LOW HIGH MEAN CHANGE
initially expected, as well as a recent pick-up in LPG cracking
demand weighed on naphtha, as reported earlier. Aug 371.00 372.00 371.500 -1.000

Sep 368.50 369.50 369.000 -0.750

The outlook for September-arrivals will depend on possible Oct 367.75 368.75 368.250 -0.250
gasoline demand pick up in the U.S. and Europe during the
summer, a second source said. If gasoline blending demand is
NAPHTHA EAST-WEST SPREADS ($/mt)
weak, that could boost naphtha arbitrage volumes to Asia, he
MONTH LOW HIGH MEAN CHANGE
added.
Aug 13.00 14.00 13.500 0.500

Japan’s ethylene production in June fell 4.5% from the previous Sep 14.00 15.00 14.500 0.500
month amid scheduled turnarounds at three ethylene plants, Oct 14.50 15.50 15.000 0.250
according to the Ministry of Economy, Trade and Industry. Output
was at 418,500 mt, down from 438,1000 mt in May.
FOB SINGAPORE CLOSE NAPHTHA SWAP ($/bbl)
MONTH LOW HIGH MEAN CHANGE

Aug 40.35 40.45 40.400 -0.300

Sep 39.60 39.70 39.650 -0.300

Oct 39.35 39.45 39.400 -0.250

30 DAYS CFR JAPAN NAPHTHA CRACK SPREADS ( $/mt ) 30 DAYS CFR JAPAN NAPHTHA TIME SPREADS ( $/mt )

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 2
OPIS ASIA NAPHTHA & LPG REPORT

LPG Commentary, Prices

LPG CFR ($/mt)

PROPANE LOW HIGH MEAN CHANGE

KPC issues 33:11 CFR sell tender for Aug. 26-Sept. 6 CFR Japan 349.50 350.50 350.000 4.000

Japan arrival CFR South China 362.50 363.50 363.000 26.000

BUTANE LOW HIGH MEAN CHANGE

Asian LPG prices edged higher on stronger paper value and
CFR Japan 336.50 337.50 337.000 3.000
.

physical bids, despite weaker overnight crude.

CFR South China 349.95 350.05 350.000 3.000
LPG (11:11) LOW HIGH MEAN CHANGE
In the H2 Aug. delivery cycle, the highest bid was placed at a
CFR Japan 343.00 344.00 343.500 -22.000
discount of $2/mt to the Aug. Far East quotes, against lowest offer
CFR South China 356.00 357.00 356.500 0.000
at a premium of $1.25/mt, for a 23,000 mt propane parcel.
FOB ($/mt)
In the H2 Sept. delivery cycle, the lowest offer was at a premium of
ARAB GULF LOW HIGH MEAN CHANGE PREM/DISC
$2/mt to the Far East quotes, including Marcus Hook origin.
Propane 343.50 344.50 344.000 8.000 -35.000
Butane 330.50 331.50 331.000 6.000 -35.000
In the FOB market, a Chinese trader placed a repeated offer at a
discount of $20/mt to the Aug. CP for a 45,000 mt propane parcel
FAR EAST PROPANE ($/mt)
loading Aug. 17-18 from Mesaieed.
LAYCAN LOW HIGH MEAN CHANGE PREM/DISC

H1 Aug 349.50 350.50 350.000 5.000 0.000

KPC may not award its 33:11 FOB sell tender that closed on Friday
H2 Aug 349.50 350.50 350.000 5.000 0.000
due to a lack of bids, and subsequently issued a fresh tender on
H1 Sep 350.50 351.50 351.000 4.000 -5.000
CFR basis, according to sources, adding that the latter is likely to be
same cargo, based on the delivery date range.
FAR EAST LPG (11:11) ($/mt)
LAYCAN LOW HIGH MEAN CHANGE PREM/DISC
A south China importer and distributor bought at a premium of
H1 Aug 343.00 344.00 343.500 4.000 -6.500
5.50-5.70 cts/gal to Mont Belvieu prices a 2H Aug. loading 22:22 lot
H2 Aug 343.00 344.00 343.500 4.000 -6.500
from the USGC last week, said sources, adding that Chinagas Glory,
H1 Sep 344.00 345.00 344.500 3.000 -11.500
a newly built VLGC, will be used to lift the cargo.
FAR EAST PROPANE SWAPS ($/mt)
Japan imported 573,000 mt LPG in June, down 32% on-year, based
MONTH LOW HIGH MEAN CHANGE
on Japan Finance Ministry data.
Aug 349.50 350.50 350.000 0.000
Sep 355.50 356.50 356.000 0.000
Japanese importers are seeking evenly-split Aug. delivery cargoes
Oct 360.00 361.00 360.500 0.000
for inventory building, said sources.
CP PROPANE SWAPS ($/mt)
MONTH LOW HIGH MEAN CHANGE

Aug 378.50 379.50 379.000 6.000

Sep 361.00 362.00 361.500 6.500

30 DAYS PRICE FOR PROPANE SPREADS ($/mt) Oct 354.50 355.50 355.000 3.000

PROPANE/BUTANE CP SWAPS DIFFERENTIAL ($/mt)

MONTH LOW HIGH MEAN CHANGE

Aug 12.50 13.50 13.000 2.000

SAUDI ARAMCO LPG CONTRACT PRICES ($/mt)

MONTH PROPANE CHANGE BUTANE CHANGE

Jul 360.000 10.000 340.000 10.000

SONATRACH LPG CONTRACT PRICES ($/mt)

MONTH PROPANE CHANGE BUTANE CHANGE

Jul 260.000 5.000 340.000 95.000

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 3
OPIS ASIA NAPHTHA & LPG REPORT

Cracking Survey
.

LPG Cracking Survey • CFR NE Asia ethylene-naphtha spread up $13/mt to $363-

LPG CRACKING VOLUME (‘000mt) 463/mt, in week Jul.10-16, with ethylene steady at $750-
800/mt, per IHS Markit data
• Buyers cautious on weakened affordability of derivatives
and anticipation of lower Aug. prices
• U.S. ethylene flows into N.E. Asia expected to decline
from late July due to unplanned outage of a 1.05mil mt/y
BTP cracker in Port Arthur, Texas
.

PROPANE/BUTANE CRACKING VOLUME (‘000mt)

CFR PROPANE, LPG/CFR NAPHTHA RATIO

LAYCAN PRO/NAP CHANGE LPG/NAP CHANGE

1st Half Month 0.910 0.018 0.893 0.015

2nd Half Month 0.925 0.019 0.908 0.016

3rd Half Month 0.940 0.016 0.923 0.014

Arbitrage Economics

Arb Economics
NAPHTHA ARBITRAGE VOLUME (‘000mt)
.

• Recent declines in freight costs support West-to-East

arbitrage economics 
• Aug arrival estimates revised upwards to 1.8 million mt
from 1.2-1.5 million mt previously,
• Recent fixtures show mid-July, late-July loadings from
Huelva, Eleusis, Tupase heading to northeast Asia
• Europe naphtha July crack fell to -$2.51/bbl on Friday,
down $1.49/bbl on week
.

US-ASIA LPG VOLUME (‘000mt)

.

• Houston-Chiba freight firmed as more vessels move via

Cape limiting vessel availability for 2H Aug. loading
• Ras Tanura-Chiba freight supported by demand for early-
Aug. lifting from AG and previous delays in India
• Newbuild VLGC “Chinagas Glory” delivered on Jul. 15,
totaling six from Jiangnan Shipyard this year
• Vessel was used by a south China importer to pick up a
late Aug. 22:22 cargo from USGC
.

Freight

FREIGHT RATES ($/mt) PROPANE SPOT CARGO FLOW ECONOMICS ($/mt)

ROUTE PRODUCT PRICE PROPANE MONTH LOW HIGH MEAN CHANGE

Sing-Japan Naphtha 11.93 Mont Belvieu Swap Aug 251.49 254.35 251.721 -0.703
Sep 252.11 254.98 252.372 -0.677
AG-Japan LR 1 Naphtha 14.51
Oct 252.79 255.65 253.024 -0.703
AG-Japan LR 2 Naphtha 15.81 Diff to Far East Aug -98.78 -97.78 -98.279 -0.688

Houston - Chiba (via Panama) LPG 68.00 Sep -104.13 -103.13 -103.628 -0.688
Oct -107.98 -106.98 -107.476 -0.687
Houston - South China LPG 73.00
USGC FOB Resale Diff H2 Aug 24.75 29.96 27.353 0.000
Middle East Gulf - Japan LPG 37.50 H1 Sep 24.75 29.96 27.353 0.000

Middle East Gulf - South China LPG 29.00

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 4
OPIS ASIA NAPHTHA & LPG REPORT

Gasoline Commentary, Prices

GASOLINE FOB SINGAPORE ($/bbl)

PRODUCT LOW HIGH MEAN CHANGE PREM/DISC

Kenya seeks more 93 RON for August-September 92-RON 44.15 44.25 44.199 -0.467 0.041

. Asian gasoline markets on Monday weakened on worries about 95-RON 45.69 45.79 45.737 -0.586 0.042
resurgent of the coronavirus disease 2019 (COVID-19), while Kenya 97-RON 46.64 46.74 46.687 -1.263 --
sought more 93 RON for delivery in the next two months as the
government relaxed curbs against the pandemic. FOB ARAB GULF ($/bbl)
PRODUCT LOW HIGH MEAN CHANGE PREM/DISC
Singapore 92, 95 and 97 RON cracks dipped $0.227-1.023/bbl to 92-RON 43.13 43.23 43.184 -0.221 3.700
plus $1.349/bbl, plus $2.887/bbl and plus $3.837/bbl, respectively.
95-RON 44.67 44.77 44.721 -0.341 4.300

The 92, 95 and 97 RON spot gasoline were also assessed lower by
$0.467-1.263/bbl to $44.199/bbl, $45.737/bbl and $46.687/bbl, SINGAPORE 92 RON GASOLINE SWAP ($/bbl)
respectively. MONTH LOW HIGH MEAN CHANGE

Aug 44.12 44.22 44.170 -0.510

Kenya issued a tender to buy more 93 RON cargoes for August-
Sep 44.21 44.31 44.260 -1.490
September than previous months.
Oct 44.11 44.21 44.160 -1.450

It sought three 75,400 mt-parcels for delivery on Aug. 28-30, Sept. SINGAPORE 95 RON GASOLINE SWAP ($/bbl)
7-9 and Sept. 20-22 into Kipevu Oil Terminal (KOT), a tender
MONTH LOW HIGH MEAN CHANGE
document showed.
Aug 45.67 45.77 45.720 -0.590

Sep 45.86 45.96 45.910 -0.570

The tender closes on July 28 with a validity until July 29, according
to the invitation. Oct 45.86 45.96 45.910 -0.530

GASOLINE CRACK SPREADS ($/bbl)

On July 6, Kenyan President Uhuru Kenyatta relaxed lockdown
PRODUCT LOW HIGH MEAN CHANGE
measures including the lifting of the internal travel restrictions,
according to a government statement. 92-RON 1.30 1.40 1.349 -0.227

95-RON 2.84 2.94 2.887 -0.346

The President also announced the end of a ban of movement in 97-RON 3.79 3.89 3.837 -1.023
and out of Nairobi, Mombasa and Mandera.
GASOLINE REFORMING SPREADS ($/bbl)
Such relaxations in other countries helped gasoline demand PRODUCT LOW HIGH MEAN CHANGE
recover, as reported earlier.
92-RON 2.85 2.95 2.902 -0.217

95-RON 4.39 4.49 4.440 -0.336

(to be continued on Page 7)
97-RON 5.34 5.44 5.390 -1.013

30 DAY GASOLINE CRACK SPREADS ($/bbl) 30 DAY GASOLINE REFORMING SPREADS ($/bbl)

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 5
OPIS ASIA NAPHTHA & LPG REPORT

Tenders

TENDERS
ISSUER DETAILS INCO/PORT TIMING CLOSING DATE VALIDITY DATE
KPC Sell 33:11 LPG on FOB Mina Al Ahmadi Aug. 1-2 17-July-2020 17-July-2020
KPC Sell 33:11 LPG on CFR Chiba, Japan Aug. 26- Sept. 6 21-July-2020 21-July-2020
Tianjin Bohai Chemical Buy 4* 46kt propane on CFR Tianjin, China Aug. 2020-Dec. 16-July-2020 25-July-2020
2021
Kenya Buy 226,200 mt in three lots (75,400 mt each) KOT 28-30/08, 7-9/09, 28-July-2020 29-July-2020
of 93 RON 20-22/09
YNCC Buy OSN minimum 70% paraffin for H2 August Yosu H2 August 15-July-2020 15-July-2020
HPCL Sell 21,000 mt minimum 65% paraffin Mumbai Aug. 3-5 16-July-2020 16-July-2020

Shipping Fixtures

SHIPPING FIXTURES
VESSEL NAME SIZE (kt) CARGO LOADING DATE ROUTE CHARTERER
Sea Bird 44 Propane 11-12 Aug MH/East or West SHV
Gaz Majestic 44 Propane 18-19 Jul USGC/East Vilma
Asprouda 60 UMS 25 Jul UKC/SG BP
UACC Harmony 35 UMS 24-Jul Dongguan/SG PTT
Lian Bai Hu 60 UMS 23-Jul Dalian/SG ATS
Cordula Jacob 60 UMS 28-Jul Dalian/SG PetroChina
STI Garnet 35 UMS 25-Jul Dalian/SG PTT
Minerva Aries 80 Naphtha 25-Jul Novorossiysk/Japan Trafigura
Energy Centurion 55 Naphtha 18-Jul Sikka/SG Exxon
Hanover Square 90 Naphtha 23-Jul Eleusis/Japan Clearlake
Sauger 60 Naphtha 23-Jul Tuapse/Japan Vitol
Celsius Everett 85 Naphtha 14-Jul Milazzo/Japan Aramco
Torm Ismini 60 Naphtha 15-Jul Huelva/Japan CEPSA
Front Panther 85 Naphtha 17-Jul Skikda/Japan ST Ship
Sks Douro 85 Naphtha 20-Jul Skikda/Japan BP

Refinery Maintenance

REFINERY MAINTENANCE
REFINERY LOCATION CAPACITY START DATE PERIOD DETAILS
RIL Jamnagar 705,200 b/d 4th week in July 3-4 weeks One of CDUs at the export-oriented will be shut for
turnaround. The other CDU will operate normal. The CDUs
have equal-size capacity.
FPCC Mailiao 80,500 b/d 15-Jul-20 Unknown RDS shutdown after a fire. FPCC has another RDS with a
same capacity, which is operating normally, at the 540,000 b/
d refinery.
BPCL Kochi 210,000 b/d 10-Jul-20 2 weeks 210,000 b/d CDU shut for TA another 100,000 b/d CDU is
running at full
S-Oil Onsan 90,000 b/d late August 1 month 76,000 b/d RFCC down from June to July
CPC Corp Taoyuan 50,000 b/d 10-May-20 to 20-Aug.-2020 RFCC
HPCL Mumbai 150,000 Jan.-2021 Postponed from Q2 2020 due to manpower issues amid
COVID-19
ENEOS, Sendai Sendai, Japan 145,000 b/d 7-Jun 1 month Non scheduled maintenance for CDU. Re-start due mid-July.
ENEOS, Kawasaki No. 2 Kawasaki, Japan 170,000 b/d 18-Apr 3 months Scheduled maintenance for CDU. Re-start due late-July,
extended from early July.
ENEOS, Kawasaki No. 3 Kawasaki, Japan 65,000 b/d 16-Mar 4 months Scheduled maintenance for CDU. Re-start due late-July,
extended from late June.
Idemitsu Kosan, Hokkaido Hokkaido, Japan 150,000 b/d 11-Jun 3 months Scheduled maintenance for CDU and secondary units.
Refinery TA started June 15 and due to finish mid-
September.
Cosmo Oil, Yokkaichi Yokkaichi, Japan 86,000 b/d Autumn 1 month Scheduled maintenance for CDU.
Cosmo Oil, Sakai Sakai, Japan 100,000 b/d Autumn 2 weeks Scheduled maitenance for CDU.

Cracker/PDH Maintenance

CRACKER/PDH MAINTENANCE
CRACKER LOCATION ETHYLENE CAP PROPYLENE CAP START DATE PERIOD DETAILS
Grand Resources Dongguan, south China - 600,000 mt/y 8-Jul 3 weeks Scheduled maintenance for PDH
SP Chemicals Taixing, east China 650,000 mt/y 122,000 mt/y end July 3 weeks First major maitenance since started in Sept. 2019, no
feedstock requirement for Aug.

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 6
OPIS ASIA NAPHTHA & LPG REPORT

CRACKER LOCATION ETHYLENE CAP PROPYLENE CAP START DATE PERIOD DETAILS
Qixiang Tengda Shandong, north China - 105,000 mt/y 7-Jul 11 days Scheduled maintenance for PDH
Chem.
Mitsubishi Kashima, Japan 539,000 mt/y 325,000 mt/y 12-May 2 months Scheduled maintenace. Re-started July 8.
Chemical
Maruzen Ichihara, Japan 525,000 mt/y 336,000 mt/y 11-May 2 months Scheduled maintenace. Re-started July 13.
Petrochemical
Mitsui Chemicals Osaka, Japan 500,000 mt/y 245,000 mt/y 11-Jun 1 month Scheduled maintenance
Zhongyuan PC Henan, China 200,000 mt/y 100,000 mt/y late July 2 months Scheduled maintenance
FPCC No. 3 Mailiao, Taiwan 1.2 million mt/y 600,000 mt/y 10-Aug 50 days Scheduled maintenance
Idemitsu Kosan Tokuyama, Japan 690,000 mt/y 255,000 mt/y September 2 months Scheduled maintenace

Market News

Market News "It is possible that we will be running the CDUs at 65-70% for a few
. (Gasoline news continued from page 5) months. This is impacting all of our refined products, from
naphtha, gasoline, gasoil, jet fuel to LSFO," Lin said, adding that the
Last month, Kenya had sought up to 180,000 mt of 93 RON for July situation is still under assessment and further information will be
and August arrivals, as reported earlier. available in the coming days.

It looked for 75,000 mt each for July 26-28 and Aug. 7-9 to KOT, as Delays on orders for replacement parts, if needed, will be
well as 30,000 mt for July 5-7, but results of the tenders were not unavoidable because of the coronavirus disease 2019 (COVID-19),
available. Lin added.

Meanwhile, Formosa Petrochemical Corp. (FPCC) will cap FPCC will still proceed with its plan to shut the No. 1 RDS unit in
throughput at its 540,000 b/d refinery at Mailiao in Taiwan at 70% October for 40 days of maintenance because the catalyst is due for
for at least two to three months to curb excess high sulfur fuel oil replacement, he said. Each RDS has a nameplate capacity of 80,500
output after a fire shut one its two residue desulphurizers (RDS). b/d, according to the company annual report.

A Gasoline trader said the lower runs’ impact on gasoline markets The lower crude throughput also means that FPCC will not be
may be limited as demand may weaken due to resurgence of the forced to sell large volumes of HSFO, Lin said in reply to questions,
COVID-19 in Asia. while not refuting speculation among market participants that
repairs could take as long as six months. Both RDS were operating
Taiwan Formosa to Cap Refinery Runs at 70% for Several at 85-90% before the July 15 fire.
Months After Fire
FPCC cut run rates at its two RFCC, operating in 'high propylene'
Formosa Petrochemical Corp. (FPCC) will cap throughput at its mode, to 75% of capacity from 90% prior. It may deepen the RFCC
540,000 b/d refinery at Mailiao in Taiwan at 70% for at least two to cut in August, resulting in further gasoline and propylene
three months to curb excess high sulfur fuel oil output after a fire production loss, Lin said. Each RFCC has 84,000 b/d of capacity,
shut one its two residue desulphurizers (RDS), said a company according to the annual report.
spokesperson.
The fire, which broke out at the No. 2 RDS around 9 a.m. Taipei time
FPCC increased the operating rate at its remaining No.1 RDS to on July 15, was a result of human error, Lin said.
100% and reduced runs at its two residue fluid catalytic crackers
(RFCC) in line with the lower refinery runs, said KY Lin. --Reporting by Trisha Huang, Trisha.Huang@ihsmarkit.com; Editing
by Raj
The duration of the reduced crude runs will correspond with the Rajendran, Rajendran.Ramasamy@ihsmarkit.com
No. 2 RDS outage, he said. The company has three crude distillation
units (CDU) of 180,000 b/d each at the site.
India OMPL to Revert to Aromatics Mode in August, Halt
Instead of restoring CDU run rates, FPCC will instead negotiate with Reformate Exports
crude oil suppliers and refined products customers to reduce
offtake and supplies, given the unfavorable margins of several oil ONGC Mangalore Petrochemicals Ltd. (OMPL) plans to switch back
products, he said. to producing aromatics around the third week of August to fulfill its

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 7
OPIS ASIA NAPHTHA & LPG REPORT

ASIA-MIDEAST PRODUCTS loss of supply from OMPL has minimal impact on market balance,
he said.
HANWEI WU JONGWOO CHEON
Hanwei.Wu@ihsmarkit.com Jongwoo.Cheon@ihsmarkit.com
"The PX-naphtha spreads are now running below the $150/mt level
LUJIA WANG MASAYUKI KITANO and benzene is almost at parity with naphtha. At these levels, only
Lujia.Wang@ihsmarkit.com Masayuki.Kitano@ihsmarkit.com a refinery to PTA integrated paraxylene unit will be able to break
even," said Pujari, adding that many export-oriented PX makers
OFFICE
have cut throughput because of negative returns.
ASIA
8 Marina View
Asia Square Tower 1, #12-01 "With PX supply expected to increase further in the months ahead,
Singapore 018960 exporters are going to find it hard to generate positive margins in
the 2H of 2020," he added.
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(others), or email energycs@opisnet.com
900,000 mt of PX and 270,000 mt of benzene, was closed in early
April, shortly after India's nation-wide COVID-19 lockdown on
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For complete methodology, visit
www.opisnet.com/about/methodology
--Reporting by Trisha Huang, Trisha.Huang@ihsmarkit.com; Editing
by RajRajendran, Rajendran.Ramasamy@ihsmarkit.com
benzene and paraxylene(PX) supply commitments, said a source
with knowledge of the matter. KCS Sees Fuel Shipments Into Mexico Recover to Pre-COVID-19
Levels
The largest petrochemical producer in southern India was running
its plant in reformate mode since restarting in early May on the Fuel shipments into Mexico recovered to pre-coronavirus disease
back of better gasoline blendstock demand and margins. The 2019 (COVID-19) levels in June, Kansas City Southern said during its
resumption of benzene and PX production was delayed from mid- quarterly earnings call on Friday.
June, as reported.
Fuel shipments have recovered a 210% from its low point in May
The producer plans to offer two 15,000 mt minimum 100-RON and ended June up 12% year over year (YOY), Chief Marketing
reformate cargoes for August loading, after selling four lots in July, Officer Mike Naatz said during the call.
the source said.
In July, the company has seen similar volume trends despite its
At least one of the July-loading parcels fetched a premium of $5- LPG shipments dropping 60% YOY as a result of changes in origins,
$5.50/mt to Singapore 92-RON gasoline prices, higher than April he added.
and May, as reported.
KCS experienced a challenging quarter with revenue down 23%
The petrochemical maker exported one 15,000-mt cargo in June and overall volumes 21% lower amid a "precipitous drop" in
and up to five from April 20 to May 31, OPIS data showed. The five shipments in April and early May, CEO Pat Ottensmeyer said.
parcels were sold at premiums of $2.50-$4.00/mt to Singapore 92-
RON while result of the June lot was undisclosed, market sources Refined products currently make up 80% of KCS' fuels shipments,
said at the time. Naatz said. The company in previous years has said the mix has
been split evenly between refined products and LPG.
Poor returns on PX, low demand for additional PX due to the
coronavirus disease 2019 (COVID-19) pandemic and better margins Adrian Calcaneo, Americas director for NGLs with IHS Markit, said
on reformate led to OMPL diverting the reformate for export, said the drop in shipments is the result of Canada becoming a less-
Ashish Pujari, IHS Markit executive director,aromatics & fibre. attractive source of LPG.

With locally-produced PX in China overwhelming the market, the "Mont Belvieu has gained market share, and also industrial and

© Oil Price Information Service (OPIS), an IHS Markit Company 20 July 2020 | Page 8
OPIS ASIA NAPHTHA & LPG REPORT

commercial LPG demand has fallen as a result of COVID-19," construction of its Port Arthur, Texas, property and is expected to
Calcaneo added. have the crude terminal online in the second part of 2021.

OPIS is a division of IHS Markit. Carloads to related to auto manufacturing also saw steeps declines
in the quarter, falling 73% YOY, Naatz said.
Naatz said Pemex is supplying clients with more domestic product.
However, the state-owned company's market share continues "Of course, the auto plant shutdowns rippled into many other
declining as imports from competitors continue to grow. segments, including our intermodal, industrial and consumer and
chemical and petroleum business units," Naatz said.
"I believe non-Pemex imports, according to the data we're looking
at, have increased about 57% on a year-over-year basis through The company has seen minor impacts to personnel and operations
May," he added. due to the pandemic, Chief Operating Officer Jeff Songer said.

KCS Mexico moved 19,200 carloads of refined products in the While risks of a COVID-19 resurgence remain, KCS anticipates a
second quarter, 15% less YOY and down 28% from Q1, company steady economic recovery boosted by stimulus measures and
fillings show. declining inventories in a number of industries, executives said.

Naatz said he does not expect crude shipments to return to their --Reporting by Daniel Rodriguez, drodriguez@opisnet.com; Editing
pre-COVID-19 levels in the near term. by Justin Schneewind, jschneewind@opisnet.com

However, the U.S. Development Group has continued with the

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