Products: Sep 7-11: FOB Korea prices for 0.5%S FO dive on lost demand by typhoons
The differential for MR-size cargoes of 92RON gasoline on an FOB Northeast Asia basis was unchanged. Sluggish demand capped the market. No spot purchases from main buyers in Asia such as Indonesia or Vietnam were still heard. Demand in those countries seemed to be declining due the COVID-19 outbreak. Meanwhile, refiners in Northeast Asia gradually started spot sales for cargoes loading in October. On Thursday, China National Offshore Oil Co issued a sell tender for an MR-size cargo of 92RON gasoline loading on Oct 10-11 from South Chia. The tender was closed on Sep 11.
In the Northeast Asian spot market, one petrochemical maker in South Korea seemed to have purchased naphtha for first-half October delivery at a premium of $4/mt to Japan quotations. In the meantime, an Asian market player said that CFR Japan naphtha prices forward would be in upward trends as demand was gaining on a sense of relatively low prices recently and supply was tightening due to low operations at refineries in Japan and South Korea owing to turnaround and cutting productions.
The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis were down. Prices were softening as inventories were piling up amid sluggish demand. In particular, more cargoes were expected to be supplied from China where domestic demand remained weak. Sources said that the market going forward would be softening, and some speculated that cargoes from South Korea loading in October could be sooner or later traded at a discount of around $1.20/bbl to Singapore quotations on an FOB basis.
The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis dived. In South Korea, port operations were keeping delayed due to the impact of typhoons, so that lost demand of bunker retreated need of 0.5% sulfur fuel oil as the feedstock of VLSFO. In the meantime, S-Oil seemed to be stopping a fluid catalytic cracking (FCC) unit at its Onsan refinery (650,000b/d).