Webinar: Maintaining Fleet Safety & Service Levels During COVID-19 Crisis

NC Clean Energy Transportation Center hosting webinar to keep trucking industry and drivers safe during corona virus reports BPN the leading source of LPG news since 1939(March 12, 2020) —  With growing concerns about the impact of COVID-19 spreading across the United States and the world, a number of precautions are being undertaken. As this crisis may affect just about every aspect of our day-to-day life, fleets are not immune to this issue and are facing the challenge of maintaining a level of service despite concerns and restrictions, as well as maintaining the safety of their employees and customers. 

Please join the North Carolina Clean Energy Technology Center and the 100 Best Fleets Round Table for the "Maintaining Fleet Safety" Webinar, Thursdsay, Mar 19, 2020, from 1:00 p.m. to 2:15 p.m.. CDT. Issues, strategies and protocol regarding how fleets are planning and responding to this crisis, while safely and responsibly maintaining operations and their expected level of service under challenging circumstances will be discussed.

You can register for the webinar at http://bit.ly/2QahGtK

Webinar: Maintaining Fleet Safety & Service Levels During COVID-19 Crisis (2)

NC Clean Energy Transportation Center hosting webinar to keep trucking industry and drivers safe during corona virus reports BPN the leading source of LPG news since 1939(March 12, 2020) —  With growing concerns about the impact of COVID-19 spreading across the United States and the world, a number of precautions are being undertaken. As this crisis may affect just about every aspect of our day-to-day life, fleets are not immune to this issue and are facing the challenge of maintaining a level of service despite concerns and restrictions, as well as maintaining the safety of their employees and customers. 

Please join the North Carolina Clean Energy Technology Center and the 100 Best Fleets Round Table for the "Maintaining Fleet Safety" Webinar, Thursdsay, Mar 19, 2020, from 1:00 p.m. to 2:15 p.m.. CDT. Issues, strategies and protocol regarding how fleets are planning and responding to this crisis, while safely and responsibly maintaining operations and their expected level of service under challenging circumstances will be discussed.

You can register for the webinar at http://bit.ly/2QahGtK

Coronavirus Casts Pall Over China’s Propane Dehydrogenation Plants

(March 2, 2020) — China’s coronavirus outbreak has triggered concerns about the country’s LPG demand. Propane dehydrogenation (PDH) plants may be forced to reduce operating rates as travel curbs extend across the country’s eastern provinces, causing transport and logistical disruptions that impact feedstock and product flows, trade sources tell S&P Global Platts.
shipping containers barges quarantined at sea due to corona virus reports BPN propane industry leading source for news since 1939
Such fears have taken a toll on Asia’s LPG market, with cost-insurance-freight (cfr) north Asia prices sliding to near five-month lows early in February before recovering. Meanwhile, the Saudi front-month March contract propane swap price fell to a near six-month low before edging higher, on worries of lower imports of Middle Eastern LPG, China’s main supply source.

Chinese LPG wholesale buyers source their propane feedstock cargos mainly via trucks from nearby terminals. However, the Chinese provincial government’s transport controls to limit the spread of the deadly virus is making it difficult for some buyers to get their loads, market source say.

They add that domestic LPG demand is estimated to have been cut by as much as 50% to 70% due to the outbreak. People are advised to remain at home and avoid unnecessary travel, while many factories are being required not to restart, exceptions being those manufacturing essential goods.

Another logistical concern sources cited were delays caused by the quarantine of very large gas carriers (VLGCs). Any crew member suspected of being infected would cause the ship to be placed under a 14-day mandatory quarantine, resulting in delays and congestion. But Chinese sources say many PDH plants have their own terminals to receive VLGCs, and most of them have their own downstream petrochemical plants to consume product.

However, PDH operations that require feedstock to be transported by truck from nearby terminals to plants are being impacted by the government’s transport controls. The sale of petrochemical products is also expected to be affected by the transport curbs, which could in turn constrain PDH plants’ operating rates, according to market sources.

Zhejiang Satellite Petrochemical is running its PDH facility at 70% to 80% capacity, sources close to the company tell S&P Global Platts, adding that Zhejiang Satellite has no plans to increase its run rate unless logistical issues improve. Zhejiang, located in eastern China, uses about 720,000 metric tons (MT) a year of propane as feedstock when operating at full capacity of 450,000 MT/year to produce propylene.

Tianjin Bohai Chemical will likely postpone the restart of its PDH plant due to sluggish demand, a company source says. This came as the facility, located in northeastern China, delayed the restart of its 600,000-MT/year propylene plant, extending the Lunar New Year holidays in the wake of the coronavirus outbreak. Tianjin Bohai uses 720,000 MT/year of propane when at full capacity.

Other PDH operators were said to have resumed operations, although Shaoxing Sanyuan may shut down again due to limited propane feedstock, market sources report. The company typically transports propane feedstock on trucks from Oriental Energy’s Ningbo terminal, but since traffic is being controlled in many regions, it is difficult to get propane delivered. However, Oriental Energy says it has been operating at full capacity since its polypropylene production is the main material used in the manufacture of medical masks and protective clothing.

Chinese PDH plants’ average operating rate was estimated at around 76% over Feb. 1-5, up from an average of 68% in January, according to a survey by the information provider JLC. However, one source familiar with the matter says China’s PDH operating rates could fall to 50% in coming weeks. On the other hand, buying interest for propylene has declined as Chinese buyers reduced purchases owing to slowing demand following the spread of the coronavirus.

(SOURCE: The Weekly Propane Newsletter, March 2, 2020. Available by subscription.)

Coronavirus Rolls Through Global Economy, Impacts World Industry

(February 21, 2020) — The coronavirus will have a larger negative effect on the global economy than the SARS outbreak in 2003, writes IHS Markit. At the time of SARS, China was the sixth-largest economy, accounting for only 4.2% of world GDP. China is now the world’s second-largest economy and represents 16.3% of international GDP. Therefore, any slowdown in the Chinese economy sends not ripples, but waves across the globe.
coronavirus update affects energy propane trade with china BPN reports the proapne industry's leading source for news since 1939
The London-based market intelligence provider notes that the coronavirus has brought large parts of the world’s second-largest economy to a standstill and the impact is being felt across industries, including energy. If the current and unprecedented confinement measures in China stay in place until the end of this month, and are lifted progressively beginning in March, the resulting economic impact will be concentrated in the first half of 2020, with a reduction of global real GDP of 0.8% in the first quarter and 0.5% in the second.

In this scenario, the coronavirus and resulting measures will reduce global real GDP by 0.4% this year. Conversely, IHS Markit expects the lifting of confinement measures to add 0.4% to global real GDP in 2021, as the release in pent-up demand filters through the economy. For an early lifting, the effects of the virus are seen as being most pronounced in household consumption and are somewhat mitigated in the industrial sector because factories are seasonally idle during January and February in China for New Year and Spring Festival holiday observances. Nevertheless, in many ways China’s economy is more vulnerable today than it was in 2003, with productivity and overall economic growth already slowing and with the effects of the U.S.-China trade conflict.

Observed is that Mainland China’s GDP has risen dramatically since SARS, therefore its impact on the world economy is also much larger than during the previous outbreak. A slowdown in Chinese growth may be a significant drag on global growth. In 2002, China contributed 23% of world GDP growth. In 2019, the country contributed an estimated 38%.

Further, China’s share of global manufacturing climbed from 6.7% in 2002 to 30.5% in 2019. Over the same period, its share of world high-tech goods rose from 7.2% to 26.3%. Manufacturing now accounts for 29.3% of China’s economy, up marginally from 27.1% in 2002.

Regarding oil consumption and trade, in 2019 China’s oil demand was 13.9 MMbbld, or 14% of the world market versus 5.6 MMbbld in 2003, which equated to 7% of world demand. China accounted for half of world oil demand growth in 2019. In 2003, the nation accounted for one-third. Mainland China is now the second-largest importer in the world, accounting for 10.4% of the world’s goods imports, compared with 4% of the world’s imports in 2002. China is also the number one importer of LPG in the world, followed by India and Japan.

China’s LPG imports rose 8.5% year on year to 20.61 million metric tons (MT) in 2019, reports S&P Global Platts. One metric ton equals 521 gallons of propane or 453 gallons of normal butane. LPG often refers to mixed cargos of various composition, evenly split or at various other percentages. These require intermediate conversion factors based on composition.

Market participants attribute the rise to increased demand from propane dehydrogenation, or PDH, plants, due to new plant startups and an increase in operating rates amid healthy processing margins. China imported 14.91 million MT of propane in 2019, up 10.8%, or 1.45 million MT from 2018. Meanwhile, butane imports rose 3.7% year on year to 5.56 million MT in 2019, customs data show. The United Arab Emirates remained the top supplier of LPG to China, followed by Qatar and Kuwait.

(SOURCE: The Weekly Propane Newsletter, February 24, 2020. Available by subscription)