<Asia Product>
In Northeast Asia this winter, there are both bullish and bearish factors for supply/demand of fuels for heating. In Japan, ENEOS is scheduled to carry out turnaround for its 249,100 barrel per day (b/d) Kawasaki refinery and Idemitsu Kosan would conduct maintenance for its 165,000 b/d Aichi plant until late November. Both refiners are building stocks throughout Japan to prepare for the maintenance. However, facility troubles frequently occurred at refineries in the first half of 2025. Some refiners build stocks at their own tanks in South Korea and bring fuels to Japan in winter. But market sources indicated that the stockbuild might be delayed owing to the facility troubles. Further, some refiners already procured a certain volume of Korean cargoes via term contracts starting this summer. Some Korean refiners mentioned that they had scarce room for spot sales of SR-sized cargoes this autumn to winter. Meanwhile, the Japan Meteorological Agency forecast that temperatures for the three-month period August to October would be higher than average throughout Japan. Some market players are worried that demand might decrease if this winter remains warm after the three-month period.

Regarding fuel oil, supply/demand is unlikely to tighten in Asia. As prices for fuel oil are higher than those for other power generation fuels including LNG and coal, procurement would be limited. On the supply side, the status of the 650,000 b/d Dangote Refinery in Nigeria is drawing attention. The refinery would finish regular maintenance for its residue fluid catalytic cracking (RFCC) by October and raise the operation rates of the RFCC. If the operation rates of the RFCC increase, supply of low sulfur fuel oil would decrease and this might result in a reduction in flow of cargoes into Asia.

<Coal>

The coal market in the second half of 2025 is forecast to be at the present level at about $110/mt or lower. While demand is predicted to remain stable in emerging countries in Asia, power demand is anticipated to decrease in China in the wake of economic slowdown. According to the customs of China, the country imported 221,702,000 mt of coal from January to June 2025, down 11.10% from the previous year. Some market players forecast that demand for coal would lack upward momentum in second-half 2025 and yearly import volumes might decrease by around 100mil mt from the previous year in China.

In India, power demand would remain firm. However, since domestic coal production is increasing and more renewable energy is used, procurement volumes of coal in the international market would unlikely rise. Further, demand for coal is not expected to grow in wide areas including Europe as environmental awareness is heightening. Moreover, power demand for heating is on the decline amid warm winters in recent years, which would also reduce demand for coal.