In addition to large capacity addition in lieu of higher IMO-led diesel demand, Chinese teapot refineries have ramped up their utilization rates (~67% vis--vis 61% in Oct-Nov18) as the country increased crude oil import More importantly, with IMO less than a month away, the forward curve for diesel depicts an incapacitated scenario of a mere USD14-16/bbl, as against consensus estimate of USD25-30/bbl. MRPL suffered refinery shutdowns in 1HFY20, leading to lower utilization (6.2mmt in 1HFY20 v/s 7.8mmt in 1HFY19) and poor GRM (USD0.13/bbl in In 1QFY20, water scarcity in Mangalore led to a major forced shutdown of 75 days. Nevertheless, in 2QFY20, MRPL faced another (precautionary) shutdown of the phase-III units after intensified monsoon caused landslide in Dakshina Given subdued global oil demand and incremental capacity addition, GRMs will likely remain suppressed for a few more months. Originally, it was expected that the INR150b phase-III expansion would generate ~USD8/bbl of GRM when SG GRM is at USD6/bbl.