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RE: COP, Valero & other US refineries slash utilization & production to help economics

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#6301

Charles Randall
Participant

Here is update news article about refineries keeping utilization rates at or below 80% to help stabilize margins/cracked spreads.
 
The US petcoke production has been at 2004 levels for the past 4 years despite the addition of several new cokers and expansion of existing ones along with other key units like FCC and crude units which also debottleneck the coker. The Utilization has been between 82-87% compared to 92-98% between 2000-2004.
 
 It doesn’t look like petcoke production level is going to break out of  ~39-40 million mtpy level of 2004 during 2009 given the low utilization likely for 1Q09 and limitations of low demand going into peak gasoline season for 2Q09. Given the steep decline in petcoke prices and rapid rise in refinery inventories perhaps it is fortunate in the short term but it sets the stage for another correction when margins & utilization return to normal and no new markets have been established for the ~ +5-7MM mtpy of additonal petcoke prodution – most of it as low value fuel coke at 6.5%S.
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