Tampa:
A labor strike at the 102,000 barrel/d Marathon Petroleum refinery in St. Paul Park, Minn., spilled into a second week due to stalled contract talks, Reuters reported.
Approximately 200 workers represented by the International Brotherhood of Teamsters Local 120 union have been locked out of the refinery since Jan. 22, approximately 24 hours after a strike was announced. The contract dispute has reportedly hinged on a management demand to replace some union employees with contract workers, argued by the union to be a safety hazard.
The facility has operated with replacement workers during the lockout. No supply disruptions were anticipated.
The first-quarter Tampa molten sulfur contract is valued at $96/lt CFR, up $27/lt from the previous $69/lt CFR contract.
Refinery rates moved higher for the week ending Jan. 29, the U.S. Energy Information Administration (EIA) reported. Refiners operated at 82.3 percent capacity during the period, a 0.6 percent increase from 81.7 percent reported previously. The rate continued to lag both the year-ago 87.4 percent and the 87.5 percent five-year average.
Daily crude inputs were noted lower, however, tracking at an average 14.641 million barrels/d, down 80,000 barrels/d from the 14.721 million barrels/d rate reported previously.
U.S. Gulf:
Genscape reported the Jan. 30 shutdown of a 110,000 barrel/d fluidic catalytic cracking unit (FCC) at the Shell refinery in Norco, La. The plant’s 250,000 barrel/d crude section has reportedly been operating at reduced capacity since Jan. 10.
A 140,000 barrel/d crude distillation unit (CDU) and 95,500 barrel/d vacuum distillation unit (VDU) were reported offline at the LyondellBasell Ind. refinery in Houston, Texas, on Feb. 2. Ongoing technical difficulties observed at the plant were likely to prompt further outages in the days ahead, Genscape noted.
Lyondell CEO Bob Patel announced plans to hold operating rates at roughly 80 percent at the company’s Houston refinery through the first quarter, according to Reuters. The facility operated at a similar level in the third and fourth quarters of 2020 due to the ongoing COVID-19 pandemic. Outputs at the 263,000 barrel/d refinery were not projected to return to pre-pandemic levels prior to second-half 2021.
Gulf export price ideas were heard in the $118-$125/mt FOB range for the week, based on potential netbacks into Morocco and Brazil.
Brazil:
Sources quoted last-done Brazil spot interest at $148/mt CFR and rising, an increase from $140-$145/mt FOB published previously. Limited first-quarter contracts were heard at $116-$119/mt CFR.
Vancouver:
Price ideas at Vancouver were reported firming to the $135-$140/mt FOB range based on rising values at China.
Alberta:
Alberta sulfur netbacks were heard moving up to (-)$31-(-)$70/mt FOB. The wide spread was said to include values from both molten and prilled tons.
West Coast:
Genscape reported the Jan. 28 shutdown of a 190,000 barrel/d CDU, 105,000 barrel/d VDU, and hydrocracker at the Chevron Corp. refinery in El Segundo, Calif. A 60,000 barrel/d catalytic reforming unit was shut one day later on Jan. 29, while a 70,000 barrel/d vacuum residual hydrotreater was reportedly taken offline on Jan. 25.
Renewed activity was reported from the affected CDU and VDU on the morning of Feb. 4. The affected catalytic reformer and hydrotreater, as well as a sulfur recovery unit, were noted remaining offline on Feb. 4.
Prilled sulfur loading from the West Coast trailed Vancouver higher, moving up to $135-$140/mt FOB, sources said. First-quarter contracts for molten sulfur were noted in the $70-$77/lt FOB range, moving up from $45-$60/lt FOB in the previous quarter.
China:
The International Maritime Organization (IMO) on Jan. 28 described the shipping industry’s transition to 0.5 percent sulfur fuels, popularly dubbed IMO2020, as an “extremely smooth” one.
The reduction from the previous 3.5 percent sulfur level, which was originally announced in October 2016, was initially expected to come at a significant cost to industry stability, driven by supply fears surrounding the new very low sulfur fuel oil (VLSFO), early significant price disparities between VLSFO and heavy fuel oil (HFO), and issues of potential noncompliance by some countries. But the fears proved to be mostly unfounded, IMO said.
“Through 2020, just 55 cases of 0.50 percent-compliant fuel being unavailable had been reported in IMO’s Global Integrated Shipping Information System (GISIS),” said Roel Hoenders, Head of Air Pollution and Energy Efficiency at IMO. “Given that more than 60,000 ships plied the world’s oceans in trade last year, this was a remarkably low percentage of ships encountering difficulty in obtaining compliant fuel.”
In addition, IMO noted zero safety issues reported worldwide to-date connected to the VLSFO transition.
The recent China spot sulfur import market was called $162-$170/mt CFR, lifting from $147-$152/mt CFR in the prior report.
Qatar:
Muntajat offers for February loading were reported at $125/mt FOB Ras Laffan, rising $24/mt FOB from $101/mt FOB in January.