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Weekly Summary

Products: Nov 9-13: Korea 0.05%S Gasoil goes up with increase LCO sales for China


In Northeast Asia, the differential for MR-size cargoes of 92RON gasoline went up. Demand for cargoes to be brought into Australia seemed to be increasing, and buying interests of traders were strengthening. On Tuesday, Formosa Petrochemicals Co (FPCC) in Taiwan sold two MR-size cargoes of 93RON gasoline (0.005%S) loading on Dec 12-16 and Dec 17-21 through a tender. Two traders were reportedly awarded at a premium of higher than 80cts/bbl to the quotations on an FOB basis and at a premium of $1.00/bbl to the quotations. Meanwhile, on the same day, China National Offshore Oil Co (CNOOC) sold an MR-size cargo of 92RON gasoline with an oxygen content of up to 0.5% loading on Dec 9-10 from South China at a premium of 30cts/bbl to Singapore quotations on an FOB basis.



In the Northeast Asia market, Mitsui Chemical was reported to have purchased 25,000mt open-spec grade and 25,000mt paraffinic grade as paraffine content at 78% for second-half December delivery at a low to mid-single digit discount to Japan quotations. A market source mentioned that CFR Japan prices for naphtha seemed to have declined, and present prices were conscious of weakness as the intermonth spread was in contango. On the back of this, LG Chemical in South Korea was seeking ethylene, so a concern that the restart of their naphtha cracker would be delayed was heightening, then demand of naphtha at present was obviously receding. In the meantime, Mitsui Chemical was conducting a tender to buy naphtha as the annual term contract starting from January. The validity was set on Nov 13.



The differential for MR-size cargoes of of 0.05% sulfur gasoil on an FOB South Korea basis advanced. Amid sluggish refining margins, refiners in Northeast Asia subdued spot sales. Oil companies in South Korea were said to be focusing on sales of light cycle oil to be brought into China. Therefore, no spot cargoes of 0.05% sulfur gasoil were seen in the market. In the meantime, as reported, demand of 0.05% sulfur gasoil for vessels off the coast of Taiwan was increasing. Several market sources pointed out that a cargo from South Korea loading in December from South Korea could be traded at a discount of around $1.50/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 was unchanged. However, in South Korea, while exports of VLSFO to Zhoushan in China whereas bunker market is firm were observed, demand of cargoes for 0.5% sulfur fuel oil was weak. A trader in South Korea said that buyers were not found, so they refrained from importing cargoes loading from Japan. Further, as crack margins of oil products were deteriorating due to recent high crude prices, GS Caltex was pulling down its refinery run rates to 60%'s. However, supply side was not seen to be tight. On the other hand, Cosmo Oil was conducting a tender to sell 40,000mt RDS bottom oil loading on Dec 20-Jan 5. The closing date was Nov 12.


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Tokyo : Products Team  Satoko Waki   +81-3-3552-2411Copyright © RIM Intelligence Co. ALL RIGHTS RESERVED.