GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB Northeast Asia basis was unchanged. However, market sentiment was strong on expectations that supply would decline. In China, as the pneumonia caused by the new coronavirus was spreading, demand of gasoline was getting weak. Refiners in Northeast Asia were talking on cargoes loading in March. A refiner in South Korea seemed to have sold an MR-size cargo of 88RON gasoline loading in March to be brought into the Philippines. Meanwhile, no fresh cargoes loading in March were seen for sale from China.

NAPHTHA

In Northeast Asia, on the impact of economic disruptions due to outbreaking new coronavirus, PetroChina was planning to reduce its crude throughput at their refineries by 320,000b/d. On the other hand, Chinese petrochemical makers were reported to have pulled down their run rates for naphtha crackers to around 80%. An Asian market player saw that declining volumes for supply side by recent run cuts for refineries in China and turnaround for refineries in the Middle East were bigger than the volumes for demand side despite shrinking supply and demand, and FOB Middle East prices rather strengthened.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis rose as some market players perceived the price level was reasonable and actively made moves to procure cargoes. Further, refiners in the region especially those in China were lowering the operation rates of their refineries, so that supply was getting tight. Therefore, market sentiment was strengthening. A market source said that some sellers in South Korea set their selling ideas at a discount of around 40cts/bbl to the quotations on an FOB basis. However, no discussions at the level surfaced to date. In Japan, one of refiners had yet to fix export schedules in March, and was not making moves to sell any spot cargoes.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was down on an expectation that demand would recede. Owing to slumps in seaborne transportations on the back of outbreak of new coronavirus, demand of 0.5% sulfur fuel oil for bunker was perceived to be weak. The deal levels to purchase for buyers moved down significantly. In Taiwan, Formosa Petrochemical (FPCC) sold 35,000mt VLSFO loading on Feb 13-15 and Feb 20-22 at a premium in the low single digit and of $2/mt to Singapore quotations (0.5% sulfur fuel oil) to Trafigura and Hin Leong, respectively. In Singapore where is the hub of Asian markets, 20,000mt VLSFO loading on Mar 8-12 was traded at a premium of $4/mt to Singapore quotations (0.5% sulfur fuel oil on the average of March) on Tuesday.

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