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Analysis: Thailand's crude imports remain tepid but spike in plastics usage boosts condensate intake

Highlights

H2 crude imports seen capped at 850,000 b/d on tepid middle distillate demand

Thailand may require close to 2 million barrels/month of condensate

Plastic products output expected to surpass 9.3 million mt in 2021

Thailand's crude oil imports fell in the first half of 2021 due to fragile domestic fuel demand amid a series of movement restriction measures, but the country's robust petrochemicals sector may continue to lift feedstock condensate purchases to supplement rising plastics usage and output.

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The country's crude oil imports fell 19% year on year to 787,469 b/d in June, and over the first half of the year fell 7.2% on year to 834,689 b/d, Customs Department data showed.

In contrast, imports of condensate rose 28.9% on year to 71,697 b/d in June, and over H1 rose 4.7% on year to 47,019 b/d.

Thailand's crude imports in H2 will likely be capped at 850,000 b/d as transportation fuel sales remain well below pre-pandemic levels in 2019, but the country may need a steady condensate supply of close to 2 million barrels/month to feed chemicals and plastic manufacturers, according to refinery operation and trading sources at PTT Global Chemical, Thai Oil and IRPC surveyed by S&P Global Platts.

Refineries have broadly set lower production plans for middle distillates as tight movement restriction measures imposed on greater Bangkok and four southern border provinces would continue to weigh on gasoline and diesel sales, the survey participants said.

Driving activity in Thailand has been on a sharp downtrend since April and was seen at 62% below baseline levels July 27, mobility data from Apple showed.

However, demand for condensate as a base feedstock for petrochemical products including polypropylene and polyethylene, which are essential for plastic manufacturing, will likely remain robust due to the spike in plastic packaging across Southeast Asia.

Polyethylene terephthalate or PET is one of the engineering plastics widely used for packaging purposes, mostly in the food and beverage industry.

The coronavirus pandemic has benefited plastics manufacturers in Thailand as online goods and food delivery has been on a rapid rise as consumers avoid public gatherings, industry analysts said. Thailand is the world's tenth-biggest exporter of plastics and the second-biggest supplier in the Southeast Asian market.

Thailand's sales and export volume of plastic products are projected to rise by an average of 2%-3% over 2021-2023, said Aphinya Khanunthong, market research analyst at Thailand's Krungsri Bank. Thai manufacturers are expected to produce more than 9.3 million mt of plastics in 2021, 56% of which is destined for export, mostly to Southeast Asia, she added.

Top suppliers, domestic output

The UAE and Saudi Arabia were Thailand's top two suppliers of crude oil in H1, the customs data showed. H1 crude shipments from the UAE fell 11% from a year earlier at 204,677 b/d, while imports from Saudi Arabia declined 0.7% over the same period to 167,109 b/d.

US crude imports also fell sharply during the period, down 49.1% on year at 65,938, the data showed.

Meanwhile, condensate imports from top supplier Australia fell 34.1% on year to 23,916 b/d in H1, but shipments from the Philippines jumped 80.3% on year to 9,226 b/d.

Thailand produced 103,417 b/d of crude oil over January-May, down 18.1% on year, with major output coming from Sirikit at 27,852 b/d, Erawan 19,278 b/d and Tantawan 14,217 b/d.

The country's condensate output in the five-month period fell 4.4% year on year to 85,281 b/d, mainly from Erawan at 34,163 b/d and Pailin 16,768 b/d, data released July 12 by the Energy Policy and Planning Office showed. Output data for H1 is scheduled for release in August.

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Thailand's top 10 crude suppliers

(Unit: b/d)

Jun 21
Jun 20
Change (Y/Y)
May 21
Change (M/M)
UAE
275,919
292,939
-5.8%
205,231
34.4%
Saudi Arabia
135,151
245,944
-45.0%
216,192
-37.5%
Malaysia
88,580
68,764
28.8%
48,286
83.4%
US
63,877
52,968
20.6%
34,347
86.0%
Indonesia
52,719
24,717
113.3%
52,904
-0.4%
Nigeria
47,187
0
-
7,305
546.0%
Brunei
30,933
38,397
-19.4%
9,845
214.2%
Russia
24,078
48,010
-49.8%
69,464
-65.3%
Australia
21,359
13,510
58.1%
0
-
Vietnam
18,993
9,647
96.9%
9,813
93.6%
Total
787,469
971,858
-19.0%
933,779
-15.7%

Jan - Jun 21
Jan - Jun 20
Change (Y/Y)
UAE
204,677
229,980
-11.0%
Saudi Arabia
167,109
168,277
-0.7%
Indonesia
67,702
18,915
257.9%
US
65,938
129,587
-49.1%
Angola
53,410
70,478
-24.2%
Malaysia
42,230
47,691
-11.4%
Libya
39,455
22,530
75.1%
Russia
38,067
49,415
-23.0%
Nigeria
32,751
37,354
-12.3%
Qatar
29,923
27,382
9.3%
Total
834,689
899,917
-7.2%

Thailand's condensate imports

(Unit: b/d)

Jun 21
Jun 20
Change (Y/Y)
May 21
Change (M/M)
Vietnam
27,351
0
-
0
-
Australia
22,067
55,610
-60.3%
42,035
-47.5%
Philippines
11,188
0
-
10,564
5.9%
UAE
11,092
0
-
0
-
Total
71,697
55,610
28.9%
52,599
36.3%

Jan - Jun 21
Jan - Jun 20
Change (Y/Y)
Australia
23,916
36,280
-34.1%
Philippines
9,226
5,118
80.3%
Vietnam
5,934
0
-
Malaysia
3,062
0
-
Nigeria
3,043
1,674
81.7%
UAE
1,838
0
-
Total
47,019
44,898
4.7%

Source: Thai customs