GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB China basis was down on sluggish demand. No spot purchases were seen from Southeast Asia including Indonesia or Vietnam. Meanwhile, on Monday, West Pacific Petroleum Co Dalian in China sold an MR-size cargo of 92RON gasoline loading on Sep 20-22 through a tender at a discount of around 95cts/bbl to Singapore quotations on an FOB basis.

NAPHTHA

In the Northeast Asian regions, demand of gasoline was lackluster, and heavy grade naphtha as the feedstock was refrained from buying, then demand was shifting to the light grade. Meanwhile, ethylene crack margins against naphtha lowered to less than $300/mt. A market source reckoned that the marginal profit for petrochemical makers was significantly shrinking, but the crackers were not in the situation to decline the runs, yet. Further, the price gap between liquefied petroleum gas (LPG) and naphtha was shrinking to around $40/mt on average as prices for LPG were seen relatively weaker than prices for naphtha. An Asian petrochemical maker showed a point of view that the profit of switching use from naphtha to LPG was narrowing so much, but prices for ethylene and propylene as the derivatives were still profitable, and petrochemical makers would keep preferring to purchase LPG.

MIDDLE DISTILLATES

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB South Korea basis was down. Tradable prices were going down further due to sluggish demand. A trader pointed out that selling ideas for cargoes loading in October from South Korea, of which discussions would start in the near future, were heard at a discount of $1.00/bbl to the quotations on an FOB basis. In the meantime, Petro Diamond Australia, a 100% subsidiary of Mitsubishi Co, reportedly sold gasoil storage tanks in Australia. The company had started gasoil business since 2014 in the country, and sold gasoil for transportation or mining sectors. However, market sources had pointed out that profits for the businesses were worsening over time.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was up on tightening supply and demand fundamentals. In South Korea, bunker premiums were soaring up, and prices of 0.5% sulfur fuel oil as the feedstock of VLSFO for bunker were also increasing sharply. On the back, heavy rainy seasons had lasted so long and the infection numbers of COVID-19 were gaining significantly again in the country, so that South Korean oil companies were pulling down their refinery runs, then supply of 0.5% sulfur fuel oil was limited, as well. Owing to this, cargoes were coming from Singapore to South Korea where was in short of supply, and the FOB Korea premiums were getting higher than the FOB Singapore prices. As a proof, Hyundai Oilbank was importing 0.5% sulfur fuel oil cargoes from Singapore, recently.

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