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1、Buy,Buy,Hold,Buy,Sell,Hold,Hold,Hold,Buy,Buy,Deutsche BankMarkets Research,AsiaEnergyOil&Gas,IndustryRefining Margins-Asia,Date3 September 2012PeriodicalDavid Hurd,CFAShawn Park,Closures&restocking,Research Analyst(+852)2203,Research Analyst(+82)2 316,Margins bounce-economies remain softNo sooner ha
2、d we lowered our Sing complex refining margin estimates for2012-13(30-July:Asia Refining Model)than Asia CDU capacity started tocome off-line(Bangchak-fire&JX Mizushima-inspections)and marginsstarted to climb-par for the course Our estimates for Sing complex refiningmargins 2012-13 are US$7.47/bbl a
3、nd US$7.69/bbl.These compare to anaverage 2011 Sing margin of US$7.66/bbl.Due to continued soft globaldemand,we are comfortable with our Sing margin expectations 2012e.Refining in Japan,Top picksSK Innovation(096770.KS),KRW163,500.00Thai Oil Pcl(TOP.BK),THB65.50Companies FeaturedS-Oil Corp(010950.KS
4、),KRW103,000.00SK Innovation(096770.KS),KRW163,500.00Formosa Petrochemical,We visited with the Japanese refiners recently.,With no hydrocarbon,(6505.TW),TWD85.40,resources,high manufacturing costs,an appreciating currency,a declining andageing population,continued urbanization and years of declining
5、 oil demand,there seems to be no way out of Japans downward refining spiral.We weretrying to find a silver lining,without success.Most of the refiners havediversified into oil E&P,chemicals and even metals and mining.A few have,BPCL(BPCL.BO),INR334.85Caltex(CTX.AX),AUD15.62HPCL(HPCL.BO),INR297.85Rel
6、iance Industries(RELI.BO),INR766.40Thai Oil Pcl(TOP.BK),THB65.50,taken their refining expertise into joint ventures in lower cost Korea,potentiallyVietnam and other countries.Only TonenGeneral seems content to stay homeand focus on cutting costs.All are reducing domestic capacity to comply withthe g
7、overnments new deep-conversion to CDU ratio(45%)by 2014:1)JXNippon closed 400k bpd in Oct 2010 and will close another 200k by Mar 2014;2)Fuji Oil closed 52k bpd in Oct 2010;3)Showa Shell closed 120k bpd in Sept2011;4)Idemitsu will close 120k bpd by March 2014;5)Bloomberg isreporting(30 August)that C
8、osmo Oil will shut its 120k bpd Sakaide refinery byJuly 2013;and 6)TonenGeneral has yet to disclose its plans to comply with thegovernments policy.None of the refineries seem interested in adding crackingcapacity;none seem interested in exporting product;all seem interested incutting CDU capacity to
9、 support domestic margins.According to two of ourhosts,Japan has 4.8mm bpd of CDU capacity but only 3.5mm bpd of demand.Closures and restocking push up margins-short-term:The Bangchak Refinery(120k bpd)was hit by a fire 04 July.Although thecompany restarted 40k bpd by end-July the remaining 80k bpd
10、is not expectedback until October.The JX Nippon,Mizushima Refinery(205k bpd)was closed25-July for inspections and is expected to be out of commission until the endof October.The two refineries together represent 1%of Asias CDU capacity.After the 2Q12 collapse in oil prices,we suspect that part of th
11、e recentstrength in product spreads/refining margins is due to restocking demand inAsia.We are comfortable with our current margin outlook for full year 2012e.Valuation and risksWe use historical price-to-book values to determine where we stand in the Asiarefining cycle and PB-to-ROE to judge relati
12、ve value among our Asian refiners.We also use a sum-of-the-parts model,particularly in the case of thosecompanies which have several businesses housed under a core refinery.Looking full cycle we see Asian refinery PB valuations trough to peak ofroughly 0.7 to 3.3x.The risks to our Asian refiners are
13、:1)higher/lower thananticipated oil prices;2)higher/lower local oil product demand;3)one-offsupply shocks such as fires and/or earthquakes;and 4)local product policies._Deutsche Bank AG/Hong KongAll prices are those current at the end of the previous trading session unless otherwise indicated.Prices
14、 are sourcedfrom local exchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank and subjectcompanies.Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firm may have a conflict of interest tha
15、t could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.DISCLOSURES ANDANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,1,2,4,5,6,7,3 September 2012Oil&GasRefining Margins-AsiaFigure 1:Deutsch
16、e Bank ratings on Asian refiners,Ordered by,28-Aug-12,Target,WM Complexity Company,Ticker,Country,DB Rating,Price,Price,Most complexLeast complex,1-Reliance Inds2-Formosa Pet3-CalTex4-SK Innovation5-S-Oil6-Thai Oil7-BPCL8-HPCL9-Essar,RELI.BO6505.TWCTX.AX096770.KS010950.KSTOP.BKBPCL.BOHPCL.BOESRO.BO,
17、IndiaTaiwanAustraliaS.KoreaS.KoreaThailandIndiaIndiaIndia,BuySellHoldBuyHoldBuyHoldHoldBuy,790.0588.3015.38173,000.00107,000.0067.75354.30313.5549.95,840.0065.6013.30200,000.00112,000.0072.00270.00260.0062.00,Ordered by,28-Aug-12,Target,YLD ComplexityMost complex38Least complex 9,Company-CalTex-Thai
18、 Oil-BPCL-SK Innovation-Reliance Inds-Formosa Pet-S-Oil-Essar-HPCL,TickerCTX.AXTOP.BKBPCL.BO096770.KSRELI.BO6505.TW010950.KSESRO.BOHPCL.BO,CountryAustraliaThailandIndiaS.KoreaIndiaTaiwanS.KoreaIndiaIndia,DB RatingHoldBuyHoldBuyBuySellHoldBuyHold,Price15.3867.75354.30173,000.00790.0588.30107,000.0049
19、.95313.55,Price13.3072.00270.00200,000.00840.0065.60112,000.0062.00260.00,Notes:WM Complexity is based on complexity ratings as formulated by consultants Wood MackenzieYLD Complexity is based on highest to lowest light product yieldsSource:Wood Mackenzie,Deutsche Bank,Page 2,Deutsche Bank AG/Hong Ko
20、ng,DeutscheBankAG/HongKong,Page3,RefiningMargins-Asia,Oil&Gas,3September2012,Figure 2:Asian refineries Complexity based on Wood Mackenzie rating scale(highest to lowest),1,2,3,4,5,6,7,8,9,10,RIL,FPCC,CalTex SK Innovation,GS,S-Oil,TOP,BPCL,HPCL,ESSAR,TOTALS-Lights-OthersGasolineReformate(etc)Kerosene
21、JetDieselNaphthaFuel OilBitumenAsphaltCokeLPGLubesOthers,100.0%60.8%39.2%16.0%0.0%0.0%6.8%38.0%16.0%0.0%0.0%0.0%7.4%4.7%0.0%11.1%,100.0%59.2%40.8%20.8%0.0%0.0%8.0%30.4%20.8%5.8%0.0%0.0%0.0%4.1%0.0%10.1%,100.0%99.0%1.0%56.0%0.0%0.0%13.0%30.0%1.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%,100.0%62.8%37.2%13.5%0.0%0
22、.0%14.1%35.2%16.5%10.3%0.0%4.6%0.0%3.0%0.0%2.8%,100.0%57.5%42.5%13.6%0.0%11.7%0.0%32.2%12.0%15.7%0.0%2.1%0.0%5.3%0.0%7.4%,100.0%57.7%42.3%10.4%0.0%20.5%0.0%26.8%18.8%7.5%0.0%2.3%0.0%3.2%0.0%10.5%,100.0%73.1%26.9%17.6%0.0%0.0%19.8%35.7%0.0%9.7%0.0%0.0%0.0%4.4%0.0%12.8%,100.0%63.4%36.6%10.8%0.0%6.9%5.
23、1%40.6%10.9%14.8%3.1%0.0%0.0%4.5%0.0%3.3%,100.0%55.6%44.4%9.5%0.0%6.3%4.1%35.7%10.5%15.5%5.3%0.0%0.0%3.7%0.0%9.4%,100.0%60.6%39.4%17.6%0.0%5.0%0.0%38.0%7.8%21.9%0.0%0.0%0.0%0.0%0.0%9.7%,Wood Mac Complexity,Refinery-Capacity(kbd)-WM Complexity-Nelson Complexity,Jamgar G58013.2614.8,Mailiao5408.927.51
24、,Lytton1087.797.72,Ulsan8407.397.47,Yeosu7607.148.31,Onsan6547.098.94,Sriracha2756.617.64,Kochi1905.805.76,Vizag1665.426.21,Jamgar Essar2804.515.76,Refinery-Capacity(kbd)-WM Complexity-Nelson Complexity,Jamgar R6609.548.71,Kurnell1366.968.23,Incheon2753.774.37,Mumbai2404.555.67,Mumbai1304.9610.31,Re
25、finery-Capacity(kbd)-WM Complexity-Nelson ComplexityNote:Although LPG is technically a Light product,in most Asian countries it is not a profitable product as price is often influenced by governments.Reliance Industries stated Nelson complexity is 11.4 for its Jamnagar R refinery and 14 for its Jamn
26、agar G refinery.Source:Wood Mackenzie,Deutsche Bank,Numaligarh607.36.6,Page4,DeutscheBankAG/HongKong,RefiningMargins-Asia,Oil&Gas,3September2012,Figure 3:Asian refineries Complexity based on product yield(highest to lowest),1,2,3,4,5,6,7,8,9,10,CalTex(est),TOP,BPCL SK Innovation,RIL(est),FPCC,GS,S-O
27、il,ESSAR,HPCL,TOTALS-Lights-OthersGasolineReformate(etc)KeroseneJetDieselLPGNaphthaFuel OilBitumenAsphaltCokeLubesOthers,100.0%99.0%1.0%56.0%0.0%0.0%13.0%30.0%0.0%1.0%0.0%0.0%0.0%0.0%0.0%0.0%,100.0%77.5%22.5%17.6%0.0%0.0%19.8%35.7%4.4%0.0%9.7%0.0%0.0%0.0%0.0%12.8%,100.0%67.9%32.1%10.8%0.0%6.9%5.1%40
28、.6%4.5%10.9%14.8%3.1%0.0%0.0%0.0%3.3%,100.0%65.8%34.2%13.5%0.0%0.0%14.1%35.2%3.0%16.5%10.3%0.0%4.6%0.0%0.0%2.8%,100.0%65.5%34.5%16.0%0.0%0.0%6.8%38.0%4.7%16.0%0.0%0.0%0.0%7.4%0.0%11.1%,100.0%63.3%36.7%20.8%0.0%0.0%8.0%30.4%4.1%20.8%5.8%0.0%0.0%0.0%0.0%10.1%,100.0%62.8%37.2%13.6%0.0%11.7%0.0%32.2%5.3
29、%12.0%15.7%0.0%2.1%0.0%0.0%7.4%,100.0%60.9%39.1%10.4%0.0%20.5%0.0%26.8%3.2%18.8%7.5%0.0%2.3%0.0%0.0%10.5%,100.0%60.6%39.4%17.6%0.0%5.0%0.0%38.0%0.0%7.8%21.9%0.0%0.0%0.0%0.0%9.7%,100.0%59.3%40.7%9.5%0.0%6.3%4.1%35.7%3.7%10.5%15.5%5.3%0.0%0.0%0.0%9.4%,Wood Mac Complexity,Refinery-Capacity(kbd)-WM Comp
30、lexity-Nelson Complexity,Lytton1087.797.72,Sriracha2756.617.64,Kochi1905.85.76,Ulsan8407.397.47,Jamgar G58013.2614.8,Mailiao5408.927.51,Yeosu7607.148.31,Onsan6547.098.94,Jamgar Essar2804.515.76,Vizag1665.426.21,Refinery-Capacity(kbd)-WM Complexity-Nelson Complexity,Kurnell1366.968.23,Mumbai2404.555.
31、67,Incheon2753.774.37,Jamgar R6609.548.71,Mumbai1304.9610.31,Refinery-Capacity(kbd)-WM Complexity-Nelson Complexity,Numaligarh607.36.6,Note:Although LPG is technically a Light product,in most Asian countries it is not a profitable product as price is often influenced by governments.Reliance Industri
32、es stated Nelson complexity is 11.4 for its Jamnagar R refinery and 14 for its Jamnagar G refinery.Source:Wood Mackenzie,Deutsche Bank,3 September 2012Oil&GasRefining Margins-AsiaFigure 4:Global refining margins,US Margins,European Margins,Asian Margins,East Coast,West Coast,Gulf Coast,Gulf Coast,NW
33、E Margin,NWE Margin,Singapore,Singapore,Japan,US$/BarrelFY2000FY2001FY2002FY2003FY2004FY2005FY2006FY2007FY20081Q20092Q20093Q20094Q2009FY20091Q20102Q20103Q20104Q2010FY20101Q20112Q20113Q20114Q2011FY20116-Jan-1213-Jan-1220-Jan-1227-Jan-123-Feb-1210-Feb-1217-Feb-1224-Feb-122-Mar-129-Mar-1216-Mar-1223-Ma
34、r-1230-Mar-121Q20126-Apr-1213-Apr-1220-Apr-1227-Apr-124-May-1211-May-1218-May-1225-May-121-Jun-128-Jun-1215-Jun-1222-Jun-1229-Jun-122Q20126-Jul-1213-Jul-1220-Jul-1227-Jul-123-Aug-1210-Aug-1217-Aug-1224-Aug-12Current QTDChg W-o-WChg Q-o-QChg Q-o-Q(y-o-y),Com plex9.807.966.309.1812.7717.4017.8618.7420
35、.5112.0511.3210.009.6310.7112.5512.2910.5513.0311.8412.8915.0515.2913.5214.2014.4515.5016.3718.3518.1916.7214.9113.4512.3911.9912.8414.7115.7515.0517.8219.3419.4818.4518.0318.3317.4717.4918.3618.3921.0323.6624.2919.4023.9824.9023.1022.0023.3323.0822.3123.0923.223%20%52%,Com plex10.318.766.759.7818.2
36、721.1921.6924.3822.1117.3415.0214.2311.1814.3513.9814.9615.4113.9214.5615.1015.2613.0115.5714.7418.2115.1515.2616.8616.9216.3719.1723.4121.3421.5518.3416.9716.9818.1916.0717.3718.3119.1422.2625.5721.7418.8619.0217.2117.7018.8221.6419.5120.4521.0819.0215.7917.3720.9619.5320.7019.366%-1%49%,Lousiana3.
37、023.802.974.185.7110.0510.4810.365.584.534.992.991.393.453.523.101.402.552.611.254.027.242.543.794.818.0611.0711.0311.147.432.501.283.082.673.212.606.135.777.827.616.015.815.967.7411.0213.1116.0113.5615.5412.5813.1610.4613.2814.7612.7213.2811.296.494.42(0.85)9.42nm-10%30%,WTI3.013.733.064.265.7110.4
38、611.9313.468.359.156.765.293.126.064.767.304.926.785.9414.5720.0629.4019.7321.0415.4718.9320.6821.4223.9125.9122.9520.3720.6022.2724.0725.5027.6822.2929.5828.2324.1123.0021.6123.1423.5125.1427.7326.6227.6525.5725.5925.5026.1129.8729.5430.1128.6923.8921.8216.5525.82-24%1%-12%,Sim ple0.98(0.35)(0.79)1
39、.001.481.560.010.710.991.990.170.36(0.68)0.470.300.420.22(0.25)0.16(2.06)(2.51)(0.41)0.44(1.09)0.052.151.712.412.010.11(1.24)(3.07)(3.17)(2.61)(1.82)(2.16)(1.37)(0.54)(0.31)0.361.28(0.11)0.29(0.04)(0.29)(0.39)0.941.073.445.674.551.274.692.811.370.281.000.01(0.08)1.001.39nm9%nm,Com plex3.501.880.893.
40、235.526.185.006.216.694.863.713.492.253.603.754.483.744.224.042.713.384.544.113.713.615.465.256.086.224.343.351.761.862.503.453.184.833.996.226.657.155.025.204.964.394.405.705.737.6610.149.276.359.827.936.505.056.095.315.786.806.6618%5%47%,Sim ple1.960.910.832.254.252.941.093.041.841.29(0.38)0.12(1.
41、16)(0.06)1.190.421.020.760.872.022.302.922.312.394.434.074.194.895.154.062.250.94(0.26)(0.47)(0.89)(0.63)(0.05)2.130.931.182.172.552.232.101.241.681.261.590.711.060.901.511.992.602.863.143.744.533.533.163.19-11%112%9%,Com plex3.592.332.013.957.456.925.657.717.594.372.983.191.512.984.784.274.694.984.
42、677.078.078.517.007.669.118.848.929.6010.009.167.616.295.154.994.925.075.817.347.097.017.828.168.077.466.446.826.416.835.315.094.976.736.427.678.368.739.6510.9510.109.328.90-8%32%5%,Com plex5.093.772.864.318.187.677.526.406.275.992.270.34(0.93)1.891.973.344.353.573.324.975.036.595.615.405.395.154.87
43、5.086.244.913.272.362.652.682.162.071.873.752.792.984.094.144.484.713.465.105.085.865.716.225.294.615.906.916.696.946.937.426.357.196.7913%47%3%,Notes:East Coast Complex=(MOINY93P/100*358/8.51)*0.45)+(DIEINYPR/100*306/7.29)*0.23)+(JETINYPR/100*331/7.89)*0.23)+(NO2INYPR/100*281/6.7)*0.09)-EUCRBRDTWes
44、t Coast Complex=(MOGLCB91/100*358/8.51)*0.45)+(DIEILAAM/100*306/7.29)*0.23)+(JETFLAPL/100*331/7.89)*0.23)+(NO2INYPR/100*281/6.7)*0.09)EUCRBRDTGulf Coast Louisiana=(MOIGC93P/100*42*0.519+DIEIGULP/100*42*0.286+JETIGCPR/100*42*0.1+N6GF3.0*0.043+LPGSMBME/100*42*0.052)-USCRLLSSGulf Coast WTI=(MOIGC93P/10
45、0*42*0.519+DIEIGULP/100*42*0.286+JETIGCPR/100*42*0.1+N6GF3.0*0.043+LPGSMBME/100*42*0.052)-USCRWTICNWE Simple=(MOGE95FC/8.53*0.17)+(NAPHNEFB/8.5*0.0649)+(JET1NEFC/7.93*0.0939)+(DIEN10FC/7.46*0.3598)+(NF03FCAR/6.66*0.2841)-EUCRBRDTNWE Complex=(MOGE95FC/8.53*0.2856)+(NAPHNEFB/8.5*0.0908)+(JET1NEFC/7.93
46、*0.0888)+(DIEN10FC/7.46*0.3745)+(NF03FCAR/6.66*0.1436)-EUCRBRDTSingapore Simple=(0.1191*MOGFC95S)+(0.1216*NAPHSINF)+(0.0999*JETKSIFC)+(0.2938*GASLSICF)+(0.3413*N6SHS380)PGCRDUBASingapore Complex=(0.2656*MOGFC95S)+(0.0741*NAPHSINF)+(0.0396*JETKSIFC)+(0.3855*GASLSICF)+0.2225*(N6SHS380/6.66)PGCRDUBAJap
47、an Complex=(0.25*0#JGL)+(0.06*NAPHJPNC/9.04)+(0.15*JETKJPCF)+(0.30*GASLJPCF)+(0.14*N6SHS380/6.66)+(0.02*LPGIJPBT/11.54)-PGCRDUBASymbol 0#JGL is a Reuters code for Regular Gasoline of JIS K2202,Grade 2,from the Tokyo Commodities Exchange.For Japan fuel oil data,Singapore residual fuel oil index has b
48、een used as a benchmark for Japan fuel oil,due to non availability of data.Source:Deutsche Bank,Reuters,Bloomberg Finance LP,Deutsche Bank AG/Hong Kong,Page 5,US$/Barrel,US$/Barrel,3 September 2012Oil&GasRefining Margins-AsiaAsian refining marginsFigure 5:Asian refining margins Singapore complex,16.
49、00,Global tight refiningcapacity,2005:Hurricane Rita andKatrina GOM,2004:China demand-Hurricane Ivan GOM,2008:TropicalStorm Hanna,14.00,12.0010.008.006.004.002.00-,Build up to US DrivingSeasonGlobal excessrefining capacity,Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec,(2.00),200020052010,200120062
50、011,200220072012,20032008Avg 2000-11,20042009,Source:Deutsche Bank,Reuters,Bloomberg Finance LPFigure 6:Asian refining margins Japan complex16.0014.0012.0010.008.006.004.002.00-,(2.00),Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec,(4.00),200020052010,200120062011,200220072012,20032008Avg 2000-11,2
