WOOD Flash – European refining and petrochemicals margins monthly: June 2020
If we thought May was bad, June has proven to be even worse. As the lockdowns continued to reduce demand, and OPEC cuts reduced the availability of crude oil, benchmark margins sank even further and company model refining margins were negative as well. There was a marginal improvement in product cracks, with gasoline cracks increasing from -USD 4.1/bbl to -USD 0.3/bbl. Diesel cracks also improved, but were just USD 4.0/bbl, while fuel oil cracks remained at a relatively strong level of -USD 9.4/bbl. Rising consumption should lead to improvements but, as OPEC reverses its cuts, fuel oil will suffer, in our opinion. PKN Orlen, MOL and Hellenic Petroleum all reported negative model refining margins. Olefin margins remain weak, but ethylene improved, while propylene weakened. Aromatics remain very weak, but polymer margins are still flat. PKN’s petchems margins were the strongest, close to their average for the month, while MOL’s margins are 30% below the June average currently.
Polski Koncern Naftowy Orlen's activities are divided into three main business segments: the Refining Segment that comprises crude oil processing as well as wholesale and retail trade in refinery products. The Petrochemical Segment that encompasses production and sale of petrochemicals and chemicals. The Retail Segment that comprises of sales at petrol stations. Co.'s basic products include gasolines, diesel oils, light heating oil, Jet fuel, liquid gas, polyetylene, polypropylene, benzene, butadiene, acetone, phenol, glycols, toluen, ortoxylene.
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