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Products: Jul 1-5: CFR Japan prices for 0.3% sulfur fuel oil rise with climbs in LSFO deamand due to IMO issue

2019/07/08 07:00


The differential for MR-size cargoes of 92RON gasoline on an FOB China basis stayed intact. No spot sales for cargoes loading in August were heard. CPC Co in Taiwan was planning to skip any spot sales for cargoes loading in August. The company was scheduled to shut down an 80,000b/d residual fluid catalytic cracker at its Dalin refinery (350,000b/d) for two months from September. Formosa Petrochemicals Co (FPCC) was also possibly going to skip spot sales of gasoline loading in the month. As the fuel oil crack margins over Dubai crude oil were recovering, the company was lowering the operation of RFCCs. In addition, the company was said to reduce crude throughput from next week. In the meantime, no spot purchases were seen from Southeast Asia. 



In Northeast Asia, while prices for heavy grade naphtha were firm, prices for light grade naphtha were staying at a slight discount to Japan quotations. On the other hand, Asian refineries were in reduction. Formosa Petrochemical Co (FPCC) reduced an operational rate at its 540,000 b/d Mailiao refinery to 90% in July, down 6.5% from a month ago. Meanwhile, the company was about to have its naphtha cracker on full operations in line with a recovery in demand. A run rate on the cracker was once reduced to 95% in June due largely to a fall in demand in Asia.



The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia hovered. Discussions on cargoes loading in August started. A refiner in South Korea made moves to sell two MR-size cargoes of gasoil either 0.001%S or 0.05%S grade. However, deals had yet to be heard. In Taiwan, CPC Co became valid a sell tender for 250,000barrels of 0.001% sulfur gasoil loading in August on Friday. Formosa Petrochemicals Co (FPCC) was conducting a sell tender for 0.001%S and 0.05%S gasoil cargoes loading in August. In Japan, any spot sales by refiners had yet to surface. However, a market source said that the volume of spot cargoes in August was expected to stay few, following July.



The differential for MR-size cargoes of 0.3% sulfur fuel oil on a CFR Japan basis was up. Prices of low sulfur fuel oil strengthened further in line with IMO regulation head next year. South Korea’s S-Oil sold residue hydrodesulfurizing plant (RDS) bottom and slurry oil. Prices were said to have been concluded at a premium of above $140.00/mt to Singapore quotations (180cst). One South Korean oil company perceived that the cargo would be equal to a premium of around $160.00/mt to Singapore quotations (180cst) after blending cost and freight were taken into account on a CFR Japan basis.


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Tokyo : Products Team  Yasuaki Yokoi  +81-3-3552-2411
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