Refiners risk overbuilding with petchem shift

摘要

South Korea’s refiners may be building themselves into glutted markets for ethylene and related products as they seek higher petrochemical profits. The four refiners, as well as South Korean petrochemical firms, are splurging on steam crackers, to the point that the country’s ethylene output capacity is due to rise by more than 50pc to almost 14mn t/yr by 2023. Their plan is to shift revenue weightings to products with high profit margins and reduce reliance on transportation fuels - a mature domestic market with dim prospects for demand growth. South Korean oil products demand rose by 1.8pc last year to 2.57mn b/d, but this would have fallen by 2.9pc if it were not for a 6.6pc gain in naphtha use to 1.26mn b/d. Naphtha demand has continued to rise in 2018, up by 1.1pc on the year to 1.25mn b/d by July, data from state-owned oil firm KNOC show.