Products: Nov 13-17: Prices for non-oxy grade gasoline go up on tight supply
Gasoline: Prices for non-oxy grade go up on tight supply
The differential for MR-size cargos of 91RON gasoline on an FOB South Korea basis and the differential for MR-size cargoes of 92RON gasoline on an FOB Japan basis went up on tight supply. With refining margins worsening, refiners in Northeast Asia were reducing their productions of gasoline, so that a sense of thin supply for December was spreading out in the spot market. This week, Hyundai Oilbank in South Korea reportedly sold an MR-size cargo of 92RON gasoline of non-oxy grade at a premium of $2.60/bbl the quotations on an FOB basis. Based on the deal, it was perceived that 91RON gasoline could be traded at a premium of around $1.60/bbl to the quotations on an FOB South Korea basis.
Naphtha: Talks on H1 Jan start with tight supply
Open-spec naphtha prices on a CFR Japan basis were at a premium of $2.50-3.50/mt to Japan quotations to be assessed 30 days before delivery. Talks on cargoes for delivery in the first half January started. Japan's Asahi Kasei Mitsubishi Chemical Ethylene (AMEC) bought 25,000mt of open-spec for delivery in the same period at a premium of $2.00-3.00 to the quotations on a CFR basis via a tender closed on Thursday. Many market participants showed a view that South Korean companies might move on procurements for January cargoes because they decreased stock volumes in December due to the end of the fiscal year. On the supply side, regular maintenance was scheduled at refineries in the Middle East and supply was expected to decrease.
Middle distillates: Jet fuel up but 10ppm GO lacks strength
The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went up late this week. The arbitrage window from Asia to Europe and the U.S. West Coast widened, and buying interest was strengthening for cargoes from other regions. Under this circumstance, some traders pointed out that cargoes from South Korea loading in mid-November could be traded at a premium of around 70cts/bbl to the quotations on an FOB basis.
In Taiwan, CPC Corp would not purchase cargoes in Dec. The company shut down the 150,000 barrels per day crude distillation unit for regular maintenance at its 350,000b/d Talin refinery. However, the company would not need cargoes for short-covering as the maintenance was expected to be finished as planned by the end of November.
The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia lacked a strength as supply/demand fundamentals were expected to be slackening on the back of increasing supply. A market source said that refiners in South Korea were focusing on productions of winter-spec gasoil. In China, oil companies were expected to increase gasoil exports and reduce gasoline by considering profitability of the two fuels. Meanwhile, cargoes from the Middle East or India were flowing into Singapore rather than Europe where gasoil demand remained sluggish. On the other hand, procurements of cargoes for the Australian market were not heard as troubles at a refinery had been eased.
Fuel oil: Japanese refiner deals a small HSFO cargo
The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB Japan basis stuck in the same level from Nov 13. A Japanese refiner seemed to sell a small lot of 380cst (3.5%S) fuel oil loading from Yokkaichi, which is located in Mie Prefecture, Central Japan, in early December. The cargo appeared to be shipped to South Korea. Moreover, it was also reported that 40,000/mt of 380cst for loading in mid-December, as previously reported.
The price for VLSFO in Tokyo Bay was at $689.50/mt as of Nov 15, up by $13.00/mt from Nov 8 with a rise in the Singapore 0.5% sulfur fuel oil paper swap values. Due to weak demand, a part of sellers decreased offer level to promote sales. However, with mid-November approaching, many sellers were inactive for sales in the spot market as they smoothly delivered cargoes with long term contracts and it supported the market prices.