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SK Innovation sees refining margins rebounding on IMO

  • Market: Oil products, Petrochemicals
  • 29/07/19

South Korean refiner SK Innovation has raised its forecast for profit margins on distillates in this year's second half, as buyers begin to stock up on low-sulphur fuel and start testing ahead of International Maritime Organisation's cap on sulphur in marine fuels from 1 January 2020.

Margins also will get a boost from seasonal demand for gasoline, SK said. The outlook follows an April-June quarter in which the Asia-Pacific refining margin benchmark the Singapore GRM dropped to a decade-low of $1/bl from $2.70/bl a year earlier.

SK said gains in crude and fuel prices stalled late in the quarter as the US-China trade war deepened, raising uncertainty about the global economy. Margins rose in the third quarter, with the Singapore GRM averaging $6.90/bl through the first 25 days of July.

This outlook echoed that of rival South Korean refiner S-Oil.

SK said it sees petrochemical margins continuing to slump. Margins will remain weak amid China's slowing economic growth and additions of paraxylene (PX) capacity, the company said.

The average profit margin on polyethylene (PE) dropped to $479/t in the second quarter, down by 11pc from the previous three months, SK said. PE spreads slid by 28pc to $378/t, while PX margins fell to just $365/t, down by 35pc from the January-March average. But the average benzene margin rose by 21pc to $85/t amid firmer US demand.

SK's second-quarter operating profit fell by 42pc from year earlier to 497.5bn won ($419.8mn). Fellow South Korean refiner Hyundai Oilbank reported a 51pc fall in operating profit to W154.4bn.


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24/02/25

Gasoline price in southern Germany down on ample supply

Gasoline price in southern Germany down on ample supply

Hamburg, 24 February (Argus) — Suppliers in southern Germany are lowering gasoline prices compared with the nationwide average on ample supply and slow demand. Gasoline availability in Southern Germany has remained sufficient enough to cover local demand even though refinery outages hampered supply, because demand has remained slow, around Karlsruhe especially. This has forced some suppliers to keep prices well below the national average. Gasoline prices in the region have fallen significantly compared with the rest of the of Germany with discounts of over €2,20/100l in the past week. Production at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria and the Miro joint venture's 310,000 b/d Karlsruhe refinery is still restricted. Both facilities experienced technical problems within days of each other at the end of January. While a third of Miro's production capacity is expected to remain offline until the beginning of March, the operators of the Bayernoil refinery began the process of bringing the affected units back online on Sunday. Meanwhile, suppliers in Cologne are selling gasoline with a premium of up to €1,60/100l to the national average. This sudden price jump points toward reduced availability at Shell's 334,000 b/d Rhineland refinery complex. Although traders in the region have not reported any gasoline shortages, the upcoming end of crude refining at the 147,000 b/d Wesseling plant of the Rhineland refinery in March could already be having an effect on prices. By Natalie Muller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Grangemouth refinery site to get $253mn in public funds


24/02/25
News
24/02/25

Grangemouth refinery site to get $253mn in public funds

Edinburgh, 24 February (Argus) — The UK government has committed £200mn ($253mn) for investment in clean energy for the site where UK-Chinese firm Petroineos' 150,000 b/d Grangemouth refinery, due to be permanently shut this year, is located. The government said on 23 February that it will work alongside private sector partners to develop new industries and leverage additional funding through the £200mn in public investment allocated from the UK's National Wealth Fund (NWF). The NWF was set up last year by the government to support investment in clean energy industries and mobilise private sector involvement across the UK. "The funding will be available for co-investment with the private sector to help unlock Grangemouth's full potential and secure our clean energy future," UK prime minister Keir Starmer said. Petroineos is planning to close the Grangemouth refinery in Scotland, this year and turn it into an import terminal because of high costs and declining fuel demand in Europe. Refineries in Europe have long faced competitiveness issues from larger and newer refineries in other regions including the Mideast Gulf, Asia-Pacific and Africa. Around 30 refineries have closed in Europe since 2000, while 2.5mn b/d of crude distillation capacity was added outside the region in the past three years alone. Only around 65 workers will be retained by Petroineos to run the terminal once the Grangemouth refinery closes. The government committed to provide a training guarantee for the staff at the refinery to gain new skills at local colleges. UK union Unite welcomed the announcement, saying that the "significant investment should be the start of a real industrial plan for Grangemouth that both safeguards Scotland's energy security and delivers the jobs of the future." But the union warned that clear timescales for the development of Grangemouth and details on jobs were needed. Unite is supporting the conversion of the refinery into a biorefinery for the production of sustainable aviation fuel (SAF). Petroineos said last year that it did not deem the refinery conversion viable, after having considered it. The firm did not immediately reply to a request for comment following the release of the new government funding. The UK government announcement comes after Scotland's first minister John Swinney committed to allocate £25mn from the proceeds of the Scottish offshore wind leasing round ScotWind to establish a just transition fund for Grangemouth. "The aim is to expedite any of the potential solutions that will be set out in the Project Willow report, as well as other proposals that will give Grangemouth a secure and sustainable future," he said last week. Project Willow is a feasibility study commissioned by the UK and Scottish governments to identify long-term industrial options for the site. The report is due to be released this spring. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Republicans target US energy rules for disapproval


21/02/25
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21/02/25

Republicans target US energy rules for disapproval

Washington, 21 February (Argus) — Republican leaders in the US House of Representatives hope to disapprove at least seven energy-related measures issued under former president Joe Biden using a filibuster-proof process created under the Congressional Review Act. House majority leader Steve Scalise (R-Louisiana) on Thursday released a list of 10 rules that his party has prioritized as "potential targets" for disapproval votes, which require only a simple majority to pass in each chamber. Republicans previously used the law in 2017 to successfully unwind more than a dozen rules, and they hope to do so again to repeal Biden-era rules they say will unnecessarily raise costs on businesses and consumers. A US Environmental Protection Agency (EPA) regulation that implements a $900/t charge on oil and gas sector methane leaks is among the rules that Republicans want to disapprove. If those implementing rules are scrapped, it would provide a temporary reprieve from a 31 August deadline for operators having to pay billions of dollars in potential fees on methane emitted in 2024. Republicans hope to vote later this year to permanently end the methane charge, which was created by the Inflation Reduction Act. House Republicans also hope to disapprove an offshore oil and gas safety rule for drilling in deepwater "high pressure, high temperature" environments that Scalise's office says will increase "burdens on energy operations". Other rules that Republicans will target for disapproval are energy conservation for gas water heaters, energy efficiency labeling standards and air pollution restrictions on rubber tire manufactures. Two of the energy measures House Republicans say they plan to target might not qualify for disapproval under the Congressional Review Act, which can only be used on a "rule". The first is a waiver that would allow California to boost in-state sales of electric vehicles and plug-in hybrids, and that President Donald Trump's administration has tried to make eligible for repeal. The second is the US Commodity Futures Trading Commission's decision to release voluntary guidance for exchanges that allow trading of carbon offset futures. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Atoba to offtake SAF from Haffner Energy in France


21/02/25
News
21/02/25

Atoba to offtake SAF from Haffner Energy in France

London, 21 February (Argus) — French renewable fuel producer Haffner Energy announced a new sustainable aviation fuel (SAF) long-term offtake agreement with SAF aggregator Atoba Energy. The two companies will also collaborate on SAF production, although Haffner is yet to disclose further details of the partnership. Atoba will offtake "a good proportion" of SAF from Haffner's 60,000 t/yr production facility at Paris-Vatry airport, Haffner global chief marketing officer Marcella Franchi told Argus . "[The partnership with Atoba] will facilitate the financing of our SAF projects, starting with Paris-Vatry", chief executive Philippe Haffner said. The Paris-Vatry project is a collaboration between the French firm and production pathway developer LanzaJet. The plant, which is due to begin operations in 2028, will use an alcohol-to-jet production pathway. To meet EU SAF regulations, the feedstock will be advanced, drawn from Annex 9 list A of the EU Renewable Energy Directive (RED II). The ATJ pathway will convert syngas, produced from the feedstock's initial treatment, into ethanol, which will then be turned into SAF using LanzaJet's processes. Last year, Haffner revealed it is creating a SAF spin-off entity called SAF Zero. Haffner will license its SAF production technology to the entity and "aims to remain a shareholder" in SAF Zero. The latter will license Haffner's technology for an upfront fee and royalty agreement. In addition, Haffner has undisclosed SAF projects for biogenic SAF and e-SAF in the US, Europe, Africa and Asia-Pacific. EU-wide SAF mandates kicked in at 2pc this year, rising to 6pc by 2030. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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S Korea's SK Chemical to build plastic waste facility


21/02/25
News
21/02/25

S Korea's SK Chemical to build plastic waste facility

Shanghai, 21 February (Argus) — South Korean producer SK Chemical will establish a Recycle Innovation Centre (RIC) at its Ulsan petrochemical complex, where eco-friendly chemical materials are produced, the firm announced on 18 February. The company will invest in new pilot facilities for the chemical decomposition of plastic waste to produce recycled BHET (r-BHET), an intermediate raw material in the production of PET and copolyester. SK Chemical aims to start up the depolymerisation pilot facility in 2026 with production capacity of 50 t/yr of r-BHET. The plant is integral to SK Chemical's chemical recycling technology and will be linked with existing commercial copolyester production facilities. The pilot facility is part of SK Chemical's efforts to process and reuse plastic waste that is difficult to recycle. The facility will validate commercialisation technology for various low-quality plastic waste types that were previously difficult to recycle using conventional methods, including textiles, fibres, films, and automotive parts. Recycling textiles is known to be highly challenging because of the diverse forms and material types mixed in a single garment, including polyester yarn as well as fibres such as cotton and various accessories such as buttons. SK Chemical previously established a PET chemical recycling plant in Shantou in south China's Guangdong province after purchasing Guangdong Shuye's r-BHET and chemically recycled PET (r-PET) units in 2022 to strengthen its recycled plastic business. The Shantou plant can now produce 70,000 t/yr of r-BHET and 50,000 t/yr of r-PET pellets. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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