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Exxon workers end French strike, Total staff continue

  • Spanish Market: Crude oil, Oil products, Petrochemicals
  • 17/10/22

Workers at ExxonMobil's 133,000 b/d Fos and 236,000 b/d Port Jerome refineries in France are returning to work after spending more than three weeks on strike in a dispute over pay. But staff at TotalEnergies' downstream sites in the country are continuing their industrial action, a move described by France's finance minister as "unacceptable".

ExxonMobil workers belonging to the CGT and Force Ouvriere unions started returning to work on Saturday. The two unions said refinery operations will return "at our pace", adding that workers are "demotivated". The GCT told Argus today that it will take "10-15 days to first restart the units, and then to produce finished gasoline, diesel".

Relations between ExxonMobil employees and management appear fractious at the end of the 24-day walkout. "The staff no longer trust management. We advise local management not to rejoice too much as this was only the start of a rebellion you will now suffer daily," the unions said.

The industrial action has caused significant delays to crude unloading operations at the Fos refinery. The Delta Blue arrived at Fos on 29 September with around 1mn bl of Doba crude from Chad on board, and it is still waiting outside the port. It has been since been joined by the Maran Solon which is carrying around 600,000 bl of US WTI and is also at anchor at the mouth of the port.

Meanwhile, CGT members at TotalEnergies' French refineries, fuel depots, biofuels and petrochemical plants remain on strike. This is "illegitimate and unacceptable", French finance minister Bruno Le Maire said today. "It is necessary to free the fuel depots, free the refineries which are blocked. The time for negotiations is over," he said.

Le Maire pointed to the fact that other unions, including the CFE and CFDT, have agreed deals with TotalEnergies. In response, the CGT said the strike at TotalEnergies' 246,900 b/d Gonreville, 219,000 b/d Donges and 109,300 b/d Feyzin refineries will continue until at least Tuesday evening, and possibly beyond.

Staff at TotalEnergies' fuel depots are being requisitioned by local government officials to open tanks belonging to the firm. It is unclear how successful this has been in enabling supplies to be delivered. Service stations across France remain short of fuel. The French energy ministry said today that 30pc of service stations are still either closed or are running short. The proportion affected in the region around Paris is higher.

The wave of industrial action in France has tightened supply of middle distillates in Europe at a time when Europe is trying to wean itself off Russian diesel ahead of the EU's ban on Russian refined product imports in February.


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Viewpoint: rHDPE packaging grade demand solid into 2025


18/12/24
18/12/24

Viewpoint: rHDPE packaging grade demand solid into 2025

London, 18 December (Argus) — A number of European recyclers report stronger demand for premium rHDPE BM grades heading into 2025, but prices and margins are likely to remain under pressure. European recyclers have endured well-publicised struggles in the past two years, but demand for rHDPE BM natural and, particularly, white grades has been the brightest spot for those operating in the polyolefin market in 2024. Prices have risen by 7-8pc over the year and — while some recyclers are keen to emphasise that contracting out their 2025 volumes has not been without its difficulties — many report that they have more orders for the coming year than they are able to supply. The closure of UK-based recycler Viridor's Avonmouth recycling plant , an rHDPE natural supplier, pushed some orders to other suppliers at the end of the year. But underlying demand also appears to be rising, and large packaging companies told Argus that they expect — based on forecasts from their customers, and with the caveat that these do not always translate into physical volumes — to be using more rHDPE in 2025 than in 2024. This shows brands are keen to further increase the recycled content of their packaging, and that many see rHDPE as a good category to focus on. But challenges remain, even for recyclers that are seeing a stronger demand outlook. Packaging manufacturers and brand owners have no legal obligation to use rHDPE in 2025, and there will be a limit to what they will pay for sustainable packaging materials. Fast-moving consumer goods (FMCG) brands' sales were hit by inflation in 2022 and 2023, and they remain cognisant of the need to find the right price point with their customers as volumes recover. As a result, decreases in the virgin HDPE market and the consequent widening of the rHDPE BM-virgin HDPE BM premium to its highest since August 2023 may become an obstacle to demand. Barring a sharp rise in crude and naphtha costs that underpin the European petrochemicals chain, Argus does not expects any major increases in HDPE prices in 2025. The potential for virgin prices to cap recyclate prices will remain for the foreseeable future. Some European recyclers are also concerned about import pressure, which is resurfacing after a lull linked to two periods of unusually-higher Asia-Europe freight rates in 2024. Asian rHDPE natural pellets have been offered up to €400-500/t ($419-$524/t) cheaper than the highest-priced European supply in recent weeks. And, although some buyers prefer the optics of supporting their regional recycling industry, or the opportunity to resolve quality issues more easily and avoid traceability concerns by working with local suppliers, this price advantage may encourage more to find import sources they are comfortable with. Recyclers also still need to find an outlet for their lower-value grades, from darker/coloured packaging grades down to grades that mainly sell into "cost-saving" markets such as pipe. A typical colour-sorting recycling process produces a range of grades, reflecting the combined natural, white and mixed-colour composition of standard HDPE packaging bales in northwest Europe. But finding a home for darker pellets can be difficult in the packaging industry, where buyers like to process white or natural grades with masterbatch colourants — concentrated pigments — to preserve the appearance of their products. And construction and industrial markets are depressed by the current economic environment and unlikely to buy large volumes unless recyclers can offer a discount to virgin material. Recyclers making premium HDPE grades may therefore feel more confident than those in other polyolefin markets heading into 2025. But until buyers are more accepting of a wide range of grades, or recently-confirmed legislation mandating the use of recyclates in polyolefin packaging kicks in, they will be under no illusion that the past few years' challenges can be consigned to the rear view mirror just yet. By Will Collins Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Ample supply to weigh on base oils market


18/12/24
18/12/24

Viewpoint: Ample supply to weigh on base oils market

London, 18 December (Argus) — European base oil prices are likely to fall further in 2025 on a persistent global supply overhang of Group III material and weaker demand for Group I spot supplies. European Group III spot prices with varying approvals face downwards pressure as overseas producers target European buyers supported by attractive margins and ample spot supplies. Stricter emission standards and engine oil specifications have supported a switch towards more premium base oils such as Group II and III away from Group I production, which is in long-term decline. Prices for fca northwest Europe (NWE) Group III 4cst and 6cst supplies with partial or no approvals fell by 16pc and 13pc to €1,125/t and €1,185/t, respectively on the week ending 13 December 2024, the lowest levels since April 2021. Rising Chinese domestic Group III production capacity has slashed the country's requirements for supplies from South Korea and the Mideast Gulf, incentivising suppliers to look towards the European market. Buying appetite for tenders out of Bahrain has also increased and spot supplies have arrived at more competitive levels. This has spurred other suppliers to lower offers further as they look to remain competitive and claim market share before the conclusion of upcoming Group III refinery expansions in 2025. The Mideast Gulf has an estimated Group III production capacity of 2mn t/yr. This is set to increase with state-controlled Saudi Aramco's base oil subsidiary Luberef focusing on expansion projects at its Yanbu facility . This will increase nameplate capacity by 76.2pc, to approximately 1.3mn t/yr of base oils by 2025. Europe remains the most attractive export outlet owing to smaller Group III production capacity in comparison to other regions. Europe has an estimated nameplate base oil capacity of 7mn t/yr, of which 13pc is Group III. A shift away from Group III imports in the US has further supported Mideast and South Korean suppliers to redirect supplies from this region and towards Europe. An announcement by Shell to convert its hydrocracker at its 147,000 b/d Wesseling refinery in west Germany into a Group III base oil production unit looks to increase domestic output by 300,000t/yr. But production is only anticipated to begin in 2026-2028, leaving European buyers mostly dependent on imports in 2025. European demand has plummeted thanks to amply supply levels — leading to a continuous wait-and-see approach from traders as they anticipate prices to fall further. Participants have reported term contracts finalised at price levels well below year ago levels and anticipate spot prices in 2025 to drop as a result. European Group I nameplate capacity has fallen by 55pc over the last decade to around 4mn t/yr owing to refinery closures, according to Argus calculations. In 2024, Eni's Group I 600,000 t/yr Livorno unit shut, and there were several refinery fires and outages elsewhere in Europe. But despite tighter spot supplies, prices fell because of weaker demand. Demand is anticipated to fall further in 2025 as producers prioritise output of more premium base oil. This includes Polish firm Orlen's Gdansk refinery expansion , adding a group II base oil unit with an estimated capacity of 400,000t/yr of Group II. Exxonmobil also announced that it will produce a high-viscosity Group II alternative to the Group I bright stock grade by 2025 out of its Jurong refinery in Singapore. Bright stock currently has no alternative, which supports its production. But Exxon's announcement is likely to weigh on refinery output and shrink the Group I market further. By Christian Hotten Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Element Alpha wins Dec Pakistan NRL bitumen sell tender


18/12/24
18/12/24

Element Alpha wins Dec Pakistan NRL bitumen sell tender

London, 18 December (Argus) — Pakistani refiner NRL has awarded its latest single cargo bitumen sell tender to Switzerland-based trading firm Element Alpha, after withdrawing its two previous tenders for October and November loading dates. Unlike in the previous tenders, which specified 6,000t of pen 60/70 bitumen to be loaded at Karachi's Port Qasim port, NRL has on this occasion agreed to sell a 4,500t bulk bitumen cargo of the same penetration grade to Element Alpha at a price in the $370-380/t fob Karachi range, sources involved the tender process said. International bitumen market participants said the cargo is expected to be loaded on the 5,249dwt Bitumen Kosei in the 20-30 December timeframe. The tanker is making its way towards Pakistan having delivered a cargo to Durban, South Africa, that had been loaded at Bahraini state-owned refiner Bapco's Sitra refinery and export terminal. International trading firms said Pakistani exports need to be price competitive with Bahraini exports in particular to be attractive, and that gaps between bids into NRL's October and November tenders for 6,000t cargoes and values sought by the exporter had contributed to their non-awards. Pakistan has become a growing source for cargo flows into South Africa over the past year or so, vying with supplies from the Mideast Gulf and with European Mediterranean flows shipped around west Africa. The last monthly NRL tender to have been awarded was a 6,000t cargo in the $390-400/t fob Karachi range under its September offering that went to an international trading firm . By Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

ISCC sets shipping, aviation green fuels PoC framework


18/12/24
18/12/24

ISCC sets shipping, aviation green fuels PoC framework

London, 18 December (Argus) — The International Sustainability and Carbon Certification (ISCC) has issued a framework to provide 'Proof of Compliance' (PoC) for the use of low emission fuels in the aviation and maritime sectors. The PoC is intended to address challenges arising from the unavailability of Proof of Sustainability (PoS) documentation for downstream operators, such as airlines and shipowners. These downstream operators are typically the obligated party in showcasing compliance with EU regulations such as the EU emissions trading system ETS and FuelEU Maritime . A major biofuel supplier expects that the framework could be used as soon as next month. ISCC said that the PoC was developed in alignment with regulatory requirements and will serve to supplement the ISCC EU scheme. The ISCC has also published a guidance document, template, and audit procedures for PoC documents. According to the guidance document, the issuance of a PoC document for a batch of certified fuel is only possible if the underlying PoS document has been surrendered to relevant competent authorities, and that a claim for the same batch of fuel further downstream is not prohibited by the relevant competent authorities. The PoC document must also include a reference to the original underlying PoS to allow for cross-referencing, as well as information on which scheme the fuel has already been counted under in which the PoS was surrendered. ISCC added that the PoC document can in principle also be used for claims in voluntary markets but recommended that involved parties examine the implications of claiming the same fuel volumes towards voluntary targets. This comes after market participants reported regulatory uncertainty regarding the use of some marine biodiesel blends throughout the year. In the Netherlands, shipping companies which purchase marine biodiesel blends including fatty acid methyl esther (Fame) might not receive PoS for RED-certified biofuel, as suppliers further up the chain would probably have already submitted these to redeem the corresponding class of Dutch renewable tickets (HBEs). Buyers could instead receive a raw material and intermediary product delivery document, in the form of a sustainability declaration with many of the same relevant details. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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