Global refinery throughput is expected to rebound by 4.5 million b/d in 2021 after a 7.2 million b/d drop in 2020, according to the International Energy Agency. It projects 78.9 million b/d throughput this year, versus 76.9 million b/d in 2020, when refinery rates were impacted by COVID-19.
Refinery runs rose 2.6 million b/d in November 2020 to 76.1 million b/d, “the largest monthly gain in seven years,” according to the IEA, which attributed the increase to refineries returning “from peak maintenance."
Global liquids supplies are expected to climb by 3.5 million b/d on average in 2021, with almost all of the total coming from crudes pumped by the OPEC+ group led by Saudi Arabia and Russia. Seventy percent of crude supply growth could come from the Middle East in 2021 as Saudi Arabia and other core OPEC producers add a combined 800,000 b/d to the market.
Europe: uneven impact
The expected increase of run rates in 2021 will be lower than the 5.5 million b/d demand growth. However, the refined products stock overhang from last year, when demand dropped by 8.8 million b/d, may be carried this year due to the “relatively high proportion of LPG/ethane” in the demand growth.
US throughputs increased in December and early January but “are likely to stagnate until a stronger demand recovery takes hold” in the second quarter. For 2020, runs fell 2.3 million b/d, at par with the demand drop.
Last year had an “uneven impact” on European refineries, the IEA said, adding that only in Germany and the Netherlands throughputs were back in their seasonal range by the fourth quarter, “but remained significantly below the seasonal levels elsewhere.”
The lowest capacity utilization was recorded in France, where it fell to 55 percent in 2020.
Italy and Portugal also recorded utilization below 70-64 percent and 66 percent, respectively. With new COVID-19 restrictions taking place, first quarter runs are forecast to fall 1.1 million b/d in Europe.
In Japan, refinery runs started increasing in November and were up in December on seasonally stronger winter demand, but activity in South Korea “stagnated” in November when steam cracker maintenance affected demand for naphtha and refinery margins. Runs increased in China by 400,000 b/d in 2020, the lowest annual gain in four years, but still outperforming other countries.
India’s state-owned refineries that serve the domestic market were back to their yearearlier utilization whereas the export-oriented ones retained lower rates. Runs in Saudi Arabia averaged 68 percent in 2020 but are expected to increase to 77 percent in 2021. Russia’s throughput was 320,000 b/d down in 2020, outpacing the 150,000 b/d demand decline.
Factors affecting the refinery valve market
One factor which will positively impact the market is the move to smart valves. There will be a substantial investment in remotely operating valves which are more effective in enhancing refinery performance.
Another factor will be fugitive emissions control. The perimeter monitoring for multiple pollutants will continue to reveal excess leakage and the need for valve upgrades.Refineries will remain major purchasers of valves. The owners are in general companies which are purchasing valves for other applications. So these companies will retain their high ranking as valve purchasers.
(1) Industrial Valves: World Marketspublished by the McIlvaine Company