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Products: Oct 9-13: FOB Korea kerosene premium narrows

2017/10/16 07:00

GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB Northeast Asia basis were unchanged. No new deals for cargoes loading in November were heard. Some oil companies in South Korea were making moves to sell spot cargoes after the long holidays, but no deals had yet to be heard. One Chinese oil company had been moving to sell cargoes loading in November since last week. As reported, two MR-size cargoes of 92RON gasoline loading in November from South China were traded at a premium in the range of $0.90-1.00/bbl to Singapore quotations (92RON) on an FOB basis.

 

NAPHTHA

Kuwait Petroleum Co (KPC) signed term contracts ranging from December to November 2018 with Asian end-users at a premium of less than $10.00/mt to Middle East quotations for some product specification. With regards to this, a source said that the premium was lower than earlier expectations. There were views also that although the premium was under $10.00/mt, a price level itself has stayed high. There has been no impact on CFR Northeast Asia spot prices from the recent term contract results.

 

MIDDLE DISTILLATES

The differential for SR-size cargoes of kerosene on an FOB South Korea basis was at a premium in the range of $0.50-1.00/bbl to Singapore quotations, down 55cts/bbl from last Friday. Weak buying interests pushed the differential lower. Inquiries for cargoes of kerosene were emerging from Japan, one of the major outlets for South Korean products, ahead of the peak demand season in winter. However, some traders lowered bids for kerosene owing to the weak market in Japan. Bids for SR-size cargoes from Japanese buyers were heard at a premium of around 50cts/bbl to Singapore quotations on an FOB South Korea basis. Therefore, sellers in South Korea showed negative attitude for the negotiation and the deal had yet to be heard. Considering the current bids level, it looked hard for deals to take place at a premium of above $1.00/bbl to Singapore quotations on an FOB basis.

 

FUEL OIL

The differentials for MR-size cargoes of 0.3% sulfur fuel oil on a CFR Japan basis was at a premium in the range of $35.00-45.00/mt to Singapore quotations, down $5.00/mt from Tuesday. Strong selling interests pushed down the differential. Traders were aggressively selling spot cargoes owing to a lack of demand in Northeast Asia. CPC Co in Taiwan had bought 40,000mt 0.3%S and 40,000mt of 0.5%S fuel oil to be delivered in November via a tender last Friday. The price for 0.3%S was reportedly at a premium of less than $40.00/mt and the price for 0.5%S was reportedly at a premium of lower than $30.00/mt to the quotations on a CFR basis. Spot purchases of cargoes to be delivered in November had yet to be seen from Japan or South Korea. Considering the deals for cargoes in Taiwan and the freight rates from Singapore, the differential on a CFR basis was estimated at a premium of around $40.00/mt to the same quotations.

 

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Tokyo : Products Team  Yoshiya Futakawa  +81-3-3552-2411
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