Forecast Maintenance Spending for North American Refiners Down in the Fall 2004

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Researched by Industrialinfo.com (Industrial Information Resources; Houston, Texas). During late 2003 and into 2004, demand for refined products has continued to increase, which has helped the refining industry post record profits this year. As a result of high profits and uncertainly of the continuance of this trend, maintenance turnaround activity at North American refineries planned for the Fall of 2004 will decrease by thirty percent as compared to 2003.

Typically, refiners conduct maintenance activities during the Spring and Fall seasons. This is because demand for refined products during this time is low, allowing refiners an opportunity to shut down units for repairs.

This year was abnormal for refiners, because of unusual market conditions and an unexpected long high profit margin cycle. Some of the unusual market conditions included increased product demand in China due to their strong economic recovery and the phasing in of the new low sulfur gasoline in the United States. These factors aided high profit margins for U.S. refiners during the first quarter.

The unexpected high profit margin season during the first quarter has continued through the second quarter. In some cases, refiners are delaying turnarounds originally scheduled for the Fall of 2004 until the first quarter of 2005, to enable them to take full advantage projected continuation of the high profit margin cycle. Industrialinfo.com is currently tracking 218 individual unit maintenance turnarounds across North America, which are planned to occur from September through December 2004. During the same timeframe in 2003, there were 310 scheduled maintenance turnarounds.

Of the 218 scheduled planned turnarounds, 25% of the maintenance activity will be performed on atmospheric crude units and fluid catalytic cracking units.

Click on the image at the right to view the North American Refinery Turnaround Map for Fall 2004.