Alarm survey shows roads in England and Wales worsen
The one-time cost of bringing roads in England and Wales up to a "reasonable" standard increased by nearly 11pc year on year to £14.02bn ($17.14bn) in 2022, the highest it has ever been, according to the Annual Local Authority Road Maintenance (Alarm) survey.
Published today by the Asphalt Industry Alliance (AIA), the Alarm showed the number of roads classified as 'good' dropped, those showing some deterioration increased, and those classed as 'poor' remained steady.
Average highway budgets increased by 4.5pc in England and Wales to £4.33bn, but double-digit inflation this year makes this a cut in real terms, the AIA said. Local authority highway budget shortfalls in 2022-23 were at record levels and the average one-time catch-up cost required to clear carriageway maintenance backlogs per authority was £106mn in England, including £36.3mn in London, and £35mn in Wales.
Rising costs linked to inflation mean engineers have postponed or cancelled road schemes in order to make savings. Not all local authorities saw an increase in funding, with 53pc reporting a cut or freeze in their budgets even before inflation is taken into account. Budgets allocated for highway maintenance is 51pc funded by central government, and 49pc from local authorities' own sources.
The average percentage of highway maintenance allocated to the carriageway dropped slightly to 50pc, the lowest in a decade. The average per authority carriageway maintenance budgets fell by 4.5pc in England to £16.9mn, and increased in London and Wales by 29pc and 32pc to £3.5mn and £4mn, respectively. The average shortfall in the 2022-23 carriageway budget has increased by 20pc to £7.7mn per authority, with the total shortfall in England and Wales reaching £1.3bn. This suggests local authorities in both countries only received around two-thirds of the amount they need to maintain their network to their own targets.
The survey reported the total number of potholes filled in 2022 was 1.4mn, down from 1.7mn in 2021 and the equivalent of one every 22 seconds. Spending on pothole repairs fell to £93.7mn last year from £107.4mn in 2021.
Around 51pc of the local road network is in good structural condition, with 15 or more years of life remaining, a fall of four percentane points from 2021.
UK government data show bitumen consumption of 1.6mn t in 2022, a 15pc year on year fall. UK bitumen production was 520,000t, 29pc lower than in 2021.
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Norway's marine bio mandate ineffective: Marine market
Norway's marine bio mandate ineffective: Marine market
London, 29 April (Argus) — Norway's 6pc advanced biodiesel mandate for marine, which came into effect in October, has done little to incentivise the uptake of physical marine biodiesel blends at Norwegian ports, market participants told Argus . As of October 2023, bunker fuel suppliers in Norway must ensure that a minimum of 6pc, on a volume per volume basis, of the total amount of liquid fuels sold per year consists of advanced biofuel in the form of fatty acid methyl ester (Fame) or hydrotreated vegetable oil (HVO). The mandate is only applicable to bunker fuels sold in the domestic market, impacting vessels operating between Norwegian ports as well as local tugboats, offshore supply barges, and fishing vessels. Market participants confirmed that the mandate operates on a mass-balance system at the moment, such that the mandate could also be met by supplying the equivalent amount of biofuels into the inland road sector. Consequently, participants said that very few buyers end up purchasing the physical marine biofuel blends, and instead marine fuel suppliers have had to utilise the mass-balance system to meet their mandated targets. This has resulted in a premium added onto conventional bunker fuels in Norwegian ports of about $56-60/t on average. A market participant described the current system as "like a CO2 tax", with most marine fuel buyers paying the premium rather than purchasing a marine biodiesel blend directly. Participants told Argus that HVO is popular and frequently used in road transport because of its superior specifications compared with biodiesel and its generally low freezing point. Norway's HVO imports typically originate from the US — Kpler data shows that about 68.4pc of HVO flows into Norway have originated from there this year. This is mainly because Norway does not apply the same anti-dumping measures as EU nations, which typically put a substantial premium on US-origin biodiesel imports. Norwegian shipowners going internationally are exempt from being liable to the additional premium imposed by the mandate. But participants told Argus that they usually have to pay the premium and then claim it back from the Norwegian Environment Agency (NEA). The system may change very soon. Market participants told Argus that the NEA is considering some changes to the mandate requirement. A gradual move away from the mass balance system is being discussed, in favour of a physical product mandate that would require biofuel blends to be sold to bunker fuel buyers. Further, a switch from an annual reporting system to a monthly one could also be on the cards. NEA is also reportedly looking at mandating the availability of marine biodiesel at all Norwegian ports and biodiesel fuel reconciliation at the tank rather than terminal. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
S Korea’s SK Innovation sees firm 2Q refining margins
S Korea’s SK Innovation sees firm 2Q refining margins
Singapore, 29 April (Argus) — South Korean refiner SK Innovation expects refining margins to remain elevated in this year's second quarter because of continuing firm demand, after achieving higher operating profits in the first quarter. SK expects demand to remain solid in the second quarter given a strong real economy, expectations of higher demand in emerging markets and continuing low official selling price (OSP) levels. This is despite the US Federal Reserve's high interest rate policy and oil price rallies, which are weighing on crude demand. The company's sales revenue dropped to 18.9 trillion won ($13.7bn) in the first quarter, down by 3.5pc on the previous quarter. Its energy and chemical sales accounted for 91pc of total revenue, while battery and material sales accounted for the remaining 9pc. But SK's operating profit increased to W624.7bn in January-March from W72.6bn the previous quarter. This came as its refining business flipped from an operating loss of W165bn in October-December to an operating profit of W591.1bn in the first quarter. SK attributed this increase to elevated refining margins because of higher oil prices, as well as Opec+ production cut agreements and OSP reductions. First-quarter gasoline refining margins almost doubled on the previous quarter from $7.60/bl to $13.30/bl, although diesel and kerosine edged down to $23.10/bl and $21.10/bl respectively. SK Innovation's 840,000 b/d Ulsan refinery operated at 85pc of its capacity in the fourth quarter, steady from 85pc in the previous quarter but higher than 82pc for all of 2023. The refiner's 275,000 b/d Incheon refinery's operating rate was at 88pc, up from 84pc in the fourth quarter and from 82pc in 2023. SK plans to carry out turnarounds at its 240,000 b/d No.4 crude distillation unit and No.1 residual hydrodesulphuriser, both at Ulsan, in the second quarter. Its No.2 paraxylene unit in Ulsan will have a turnaround in the same quarter. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
High inventories pressure Brazil biodiesel prices
High inventories pressure Brazil biodiesel prices
Sao Paulo, 26 April (Argus) — Logistical differentials for Brazilian biodiesel contracts to supply fuel distributors in May and June fell from March and April values, reflecting higher inventories and a bumper crop of soybeans for crushing, which could increase vegetable oil production. The formula for the logistics differential of plants includes the quote of the soybean oil futures contract in Chicago, its differential for export cargoes in the port of Paranagua and the Brazilian real-US dollar exchange rate. It is the portion in the pricing linked to producers' margin. Negotiations for May and June started with plants seeking higher values to recover part of the losses incurred by unscheduled stops , the result of retailers' delays in collecting biodiesel. But the supply glut has not abated, leading to a drop in prices. With higher inventories in the market, fuel distributors stuck close to acquisition goals established by oil regulator ANP for the May-June period. Sales are expected to gain traction over the next two months, as blended diesel demand traditionally gets a seasonal boost from agricultural-sector consumption linked to grain and sugarcane crops. The distribution sector expects an extension of the current supply-demand imbalance, exacerbated by significant volumes of imported diesel at ports and lower-than-expected demand. The situation has generated concern among many participants, who see this trend as a potential sign of non-compliance with the biodiesel blending mandate. ANP data show that the compliance rate with the Brazilian B14 diesel specification dropped to 83.4pc in April from 95.2pc in March, reaching the lowest level since the 2016 start of monitoring. Non-compliance with the minimum biodiesel content accounted for 67pc of the infractions recorded during the period compared to a historical average rate of 47pc. The recent end to a special tax regime for fuel importing companies offered by northern Amapa state's secretary of finance should end a significant source of diesel price distortions and help rebalance supply in the country. Variations The steepest decline in differentials took place in northeastern Bahia state, where premiums for the period ranged from R600-830/m³ (44.35-61.35¢/USG), down from R730-1,020/m³ in the March-April period, according to a recent Argus survey. In the northern microregion of Goias-Tocantins states, the premium range also dropped by around R142/m³ to R300-535/m³ from R440-680/m³. By Alexandre Melo Brazil biodiesel plant differentials R/m³ May/June March/April ± Low High Low High Rio Grande do Sul 110 380 280 450 -120 Sorriso-Nova Mutum 50 340 220 350 -90 Cuiaba-Rondonopolis 80 405 280 450 -123 Northern of Goiás-Tocantins 300 535 440 680 -142 Southern of Goias 350 500 450 650 -125 Parana-Santa Catarina 150 450 400 480 -140 Bahia 600 830 730 1,120 -210 Source: Argus survey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Lyondell Houston refinery to run at 95pc in 2Q
Lyondell Houston refinery to run at 95pc in 2Q
Houston, 26 April (Argus) — LyondellBasell plans to run its 264,000 b/d Houston, Texas, refinery at average utilization rates of 95pc in the second quarter and may convert its hydrotreaters to petrochemical production when the plant shuts down in early 2025. The company's sole crude refinery ran at an average 79pc utilization rate in the first quarter due to planned maintenance on a coking unit , the company said in earnings released today . "We are evaluating options for the potential reuse of the hydrotreaters at our Houston refinery to purify recycled and renewable cracker feedstocks," chief executive Peter Vanacker said on a conference call today discussing earnings. Lyondell said last year a conversion would feed the company's two 930,000 metric tonnes (t)/yr steam crackers at its Channelview petrochemicals complex. The company today said it plans to make a final investment decision on the conversion in 2025. Hydrotreater conversions — such as one Chevron completed last year at its 269,000 b/d El Segundo, California, refinery — allow the unit to produce renewable diesel, which creates renewable naphtha as a byproduct. Renewable naphtha can be used as a gasoline blending component, steam cracker feed or feed for hydrogen producing units, according to engineering firm Topsoe. Lyondell last year said the Houston refinery will continue to run until early 2025, delaying a previously announced plan to stop crude processing by the end of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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