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BZ Credits near 5 year high after 2023 blending

  • : Biofuels, Oil products, Petrochemicals
  • 24/09/12

Higher volumes of ethylbenzene (EB) into gasoline blending a year ago has led to a credit shortage, pushing prices to their highest levels since March 2021.

In 2022 and 2023, US Gulf coast (USGC) naphtha inventories were long as US naphtha exports declined from 400,000-500,000b/d pre-pandemic to 100,000-200,000b/d.

Over the same span of time, refiners and blenders dropped excess naphtha, a sub-octane blendstock, into the gasoline pool. This blend of gasoline spurred demand for high-octane blendstocks like EB, toluene and mixed xylenes into gasoline blending.

The US Environmental Protection Agency (EPA) requires gasoline with benzene content above a certain threshold to be offset by a credit generated by refining compliant gasoline.

The elevated blending of EB exhausted the supply of benzene credits on the open market, which bled into 2024. Credits traded near 100¢/USG early in 2024 and rose to as high as 190¢/USG over the summer. Values now span buyer interest at 160¢/USG and seller interest at 190¢/USG.

The compliance deadline for benzene credit submission is set for 31 March 2025, in which refiners must mass-balance their production over a given year and either face a credit surplus for being over-compliant or a shortage and therefore will need to procure credits on the open market.


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24/11/08

Canada climate plans not equally at risk post-Trudeau

Canada climate plans not equally at risk post-Trudeau

Toronto, 8 November (Argus) — Canada's climate policies will be overhauled if prime minister Justin Trudeau loses an upcoming federal election, but the Conservative Party might not move to roll back all of the programs. Trudeau over nine years in office has pushed through a raft of carbon pricing policies, cracked down on provinces with insufficiently ambitious plans, and even started a global "challenge" to spur more jurisdictions to price emissions. But Canada's policies have exacerbated cost-of-living concerns at a time when voters across the world are punishing incumbents for inflation, and Conservative leader Pierre Poilievre has barnstormed the country with a pledge to "axe the tax." An election must happen no later than October 2025, and the ruling Liberals are down significantly in polls. "We are going to see change, significant change," said Lisa DeMarco, a senior partner at the law firm Resilient and a member of the International Emissions Trading Association board at the Canada Clean Fuels and Carbon Markets Summit in Toronto, Ontario, this week. What "axe the tax" might mean in practice is uncertain. Inevitable targets are the country's federal fuel charge, currently at C$80/t ($57.54/t) and set to gradually increase to C$170/t in 2030, and a recently proposed greenhouse gas emissions cap-and-trade program for upstream oil and gas producers. But other policies, especially those with industry support, could remain. The country's distinct system for taxing industrial emissions, which includes a federal output-based pricing system that functions as a performance standard, "will likely be untouched," said former Conservative leader Erin O'Toole. A point of debate at the conference was what Poilievre might do with the country's clean fuel regulations, which function similarly to California's long-running low-carbon fuel standard and have boosted biofuel usage in the country. The policy is "certainly not at the top of the list" of Conservative priorities, said Andy Brosnan, president of low-carbon fuels at environmental products marketer Anew Climate. But that does not mean it will escape scrutiny. Conservatives could tinker with the program or push through more muscular changes like excluding electric vehicles, said David Beaudoin, chief executive of the climate consultancy NEL-i. "We should expect that regulation will be maybe not dismantled but somehow changed, perhaps fundamentally," Beaudoin said. In the gap left by the federal government, provinces could make up the difference with their own climate programs, panelists agreed. Quebec for instance has a linked carbon market with California, and British Columbia has its own low-carbon fuel standard. But policymakers should heed the lessons of Trudeau's declining popularity and reorient how they approach climate policy, O'Toole argued. "Try to be minimally disruptive on economically vulnerable citizens," he said. "Try not to pit industry against industry or region of the country against region." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Poland's Azoty ramps up PDH/PP operations at Police


24/11/08
24/11/08

Poland's Azoty ramps up PDH/PP operations at Police

Warsaw, 8 November (Argus) — Polish chemical conglomerate Grupa Azoty said it is making progress in ramping up production at its new 437,000 t/yr propane dehydrogenation (PDH) and 429,000 t/yr polypropylene (PP) complex in Police, although it needs time to stabilise output and ascertain the unit's economic feasibility. Azoty said both units are operating even though formal commissioning of the entire project has not yet been yet completed. It is in negotiations with the contractor to undertake final improvements and overcome some defects, it said. Azoty expects to agree with the contractor on final terms of commissioning by the end of this year. Since the start of its operations, the PP plant has produced more than 200,000t and sales of PP reached 60,000t in the third quarter, Azoty said. Azoty sees healthy demand for its PP products from European buyers that want to diversify their supply portfolio to reduce risk in delays to imports from Asia-Pacific. "We see end users want have at least 30pc of their (PP) supplies to come from local European supplies," said plant manager Andrzej Dawidowski. He said the company sells PP through its own distribution as well as through traders that market in Europe and elsewhere. Azoty expects to make adjustments to this model as soon as it stabilises output, which would enable buyers to determine their demand for Azoty's product. Azoty said the Police plant is yet to generate positive earnings, and it requires stable supplies of feedstock propane. It said it is working with suppliers to secure financing to ensure steady propane supplies. Azoty also said the letter of intent with Polish integrated Orlen, about a possible sale of a stake in the PDH/PP project was extended until end of 2024, giving them more time to discuss the possibility of co-operation. By Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Talks to restart as port of Vancouver lockout drags


24/11/08
24/11/08

Talks to restart as port of Vancouver lockout drags

Calgary, 8 November (Argus) — A labour disruption at the port of Vancouver is now into its fifth day, but the employers association and the locked-out union are to meet this weekend to try to strike a deal and get commodities moving again. Workers belonging to the International Longshore and Warehouse Union (ILWU) Local 514 on Canada's west coast have been locked out by the BC Maritime Employers Association (BCMEA) since 4 November. This came hours after the union implemented an overtime ban for its 730 ship and dock foreman members. The two sides will meet on 9 November evening with the assistance of the Federal Mediation and Conciliation Service (FMCS) in an effort to end a 19-month long dispute as they negotiate a new collective agreement to replace the one that expired in March 2023. The FMCS was already recruited for meetings in October, but that did not culminate in a deal. Natural resource-rich Canada is dependent on smooth operations at the port of Vancouver to reach international markets. The port is a major conduit for many dry and liquid bulk cargoes, including lumber, wood pellets and pulp, grains and agriculture products, caustic soda and sodium chlorate, sugar, coal, potash, sulphur, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and petroleum products. These account for about two-thirds of the movements through the port. Grain operations and the Westshore coal terminal are unaffected while most petroleum products also continue to move, the Port of Vancouver said on 7 November. As the parties head back to the bargaining table, the ILWU Local 514 meanwhile filed a complaint against the BCMEA on 7 November, alleging bargaining in bad faith, making threats, intimidation and coercion. "The BCMEA is trying to undermine the union by attempting to turn members against its democratically-elected leadership and bargaining committee, said ILWU Local 514 president Frank Morena on 7 November. "They know their bully tactics won't work with our members but their true goal is to bully the federal government into intervention." But that is just "another meritless claim," according to the BCMEA, who wants to restore supply chain operations as quickly as possible. The union said BC ports would still be operating if the BCMEA did not overreact with a lockout. "They are responsible for goods not being shipped to and from BC ports — not the union," Morena says. The ILWU Local 514 was found to have bargained in bad faith itself already, according to a decision by the Canada Industrial Relations Board (CIRB) in October. Billions of dollars of trade are at risk with many goods and commodities at a standstill at Vancouver, which is Canada's busiest port. A 13-day strike by ILWU longshore workers in July 2023 disrupted C$10bn ($7.3bn) worth of goods and commodities, especially those reliant on container ships, before an agreement was met. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Fund woes to hit Australian post-winter bitumen imports


24/11/08
24/11/08

Fund woes to hit Australian post-winter bitumen imports

Singapore, 8 November (Argus) — Australia's bitumen import demand following its June-August winter is anticipated to fall by about 20pc on the year because of prolonged funding issues and a lack of big paving projects, market participants told Argus . Australia continues to be plagued by budget and funding issues, with the country still reeling from the effects of the Covid-19 pandemic. Less funding has been allocated to road maintenance works this year and most of the local councils have decided to spend their budgets on other key sectors such as healthcare. Funding levels have overall been on a downtrend since 2020, market participants added. Although demand has risen since mid-October compared to the previous months this year, consumption levels remain unchanged from the same period in the last year as most projects are small and revolve around filling potholes, market participants said. Bitumen consumption is expected to be around 10-20pc lower on the year in 2024, the participants added, with some noting that the situation is unlikely to improve for at least two more years because of higher inflationary pressures in the country. Most importers in Australia currently have enough inventory to last until January 2025 and are not looking to procure spot cargoes on top of their term import commitments, and small volumes can be procured from the local suppliers if required, they said. Roads in Australia are set to get a maintenance boost, especially in parts such as southern Australia, according to the minister for regional development, local government and territories, but market participants argued that what "road projects" encompass has changed over the years and now includes other elements of maintenance such as grass cutting, construction of safety barriers and traffic lights, which do not involve road paving or bitumen. Of the entire budget allocated by the government, only around a third or less goes to road maintenance and paving works, Australia-based importers said. There was also a dip in demand from western Australia as authorities delayed pricing contracts for paving projects because of budgeting constraints. Australia imported around 488,874t of bitumen from January-August, according to Australian Petroleum Statistics data, compared to 605,283t from January-August 2023. Bitumen imports totalled around 932,286t in the whole of 2023, up from 915,467t in 2022. New Zealand demand to rise Conversely, New Zealand's import demand is expected to rise on the back of firm domestic consumption. Market participants in New Zealand said post-winter consumption and sales could be 3-4pc higher than the same time in 2023, which was already a record year for some importers. Importers noted the country is well on track to bringing in about 160,000-170,000t of bitumen this year. The weather has also been dry, making it conducive for road construction works. With the clear weather expected to carry on into summer, which falls between December and February, market participants said they are using this year-end period to stock up on inventory levels before the Christmas break in December. Most companies are likely to see a slowdown in road works by mid-December as contractors will leave for year-end breaks. It is important to buy enough supplies for the new year, said market participants, as February and March are usually the peak paving months for New Zealand. New Zealand imported about 54,000t in the first half of this year, compared to 144,220t during the same period last year, according to GTT data. The region imported 180,576t last year, compared to 200,615t in 2022. By Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hungary’s Mol cuts forecast for 2024 refinery runs


24/11/08
24/11/08

Hungary’s Mol cuts forecast for 2024 refinery runs

Budapest, 8 November (Argus) — Hungarian integrated oil firm Mol has revised down its 2024 forecast for crude runs at its two landlocked refineries after a "turnaround-heavy" third quarter, it said today. The company expects to refine around 11.5mn t of crude combined at the 161,000 b/d Szazhalombatta plant in Hungary and the 115,000 b/d Bratislava complex in Slovakia this year, down from its previous guidance of about 12mn t. The two refineries processed 8.25mn t of crude in January-September, down from 9.09mn t a year earlier. Their combined crude throughput was down by 11pc on the year at 2.81mn t in the third quarter. Mol carried out scheduled maintenance at Szazhalombatta between 26 July and 19 September and expects to complete maintenance work on petrochemical units at Bratislava in the first half of November. Crude intake at Mol's third refinery, the 90,000 b/d Rijeka plant on Croatia's Adriatic coast, rose by 2.6pc on the year to 802,000t in the third quarter and was largely unchanged year-on-year at 1.26mn t in January-September. The company's crude throughput forecast only includes the Hungarian and Slovakian refineries. Mol cut the share of imported crude in its overall slate to 3.35mn t, or 93pc, in the third quarter from 3.8mn t, or 97pc, a year earlier, while it almost doubled intake from its own crude production to 255,000t in July-September from 129,000t in the same period last year. Szazhalombatta and Bratislava mostly process Russian crude received through the Druzhba pipeline system under an EU oil ban waiver, while Rijeka mainly takes non-Russian seaborne crude. The profitability of Mol's refining business was hit by a 71pc year-on-year fall in its refinery margin indicator — calculated based on the Dated Brent crude benchmark — to just $3.70/bl in July-September. Its oil product sales fell by 4.2pc from a year earlier to 4.88mn t in the third quarter. This included 1.52mn t of products Mol had to buy from third parties to complement its own output and satisfy demand, a significant rise from 1.25mn t of third-party oil products it sold a year earlier. The firm's upstream oil and gas production rose by 11pc on the year to 96,100 b/d of oil equivalent (boe/d) in the July-September quarter. It has raised its full-year forecast to about 92,000-94,000 boe/d from previous guidance of around 90,000 boe/d. Mol's profit fell to 111.5bn forint ($295mn) in the third quarter from Ft175.8bn a year earlier. By Béla Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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