GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB South Korea basis was unchanged. Supply/demand fundamentals were slackening. While the COVID-19 outbreak continued, demand in Southeast Asia lacked the momentum. As of now, Petrolimiex in Vietnam alone was conducting a buy tender for 30,000mt of 95RON gasoline loading in April. The tender was closed on Thursday and its price validity date was set on Mar 29. In the meantime, exports from China were increasing due to high inventories at home. Amid slack supply/demand fundamentals in Asia, gasoline refining margins were worsening. The margins narrowed to around $6.50/bbl to Dubai crude oil.

NAPHTHA

In the Asia spot markets, deal levels for heavy full range naphtha arriving in firsts-half May were going up. An Asian market source said that prices for heavy full range naphtha as the feedstock of gasoline as the demand for summer grade started appearing were rising and the grade gap with paraffinic grade was narrowing. Further, Lotte Chemical Titan in Malaysia seemed to be seeking naphtha.

Meanwhile, In the Northeast Asia petrochemical markets, ethylene prices were down to $1,000's/mt as one of bearish factors was deemed that speculative buying by Chinese players was receding on a concern that the prices were too much high. However, naphtha prices in the area were also retreating to $500's/mt on the impact of a recent crush in crude prices, so the price gap between both products was sustaining at $500's/mt still. On the other hand, a petrochemical maker in Northeast Asia said that ethylene prices would possibly be lower than $1,000/mt after this along with restarts for units in the US and recessions in Chinese buying interests. Even in case of that, another market viewer assumed that naphtha premiums to the CFR Japan basis would just stay at a slight weaker level, supported by high operations for naphtha crackers and extensions in gasoline demand.

MIDDLE DISTILLATES

The differential for MR-size cargoes of jet fuel on an FOB North Asia basis weakened. Poor demand in Northeast Asia capped the market. As GS Caltex in the country was scheduled to finish regular maintenance of its refinery in April, the number of cargoes from the country was expected to increase in May onwards. In addition, as with the case with other oil products, jet fuel from China was possibly going to increase. It was reported that PetroChina may have sold jet fuel at a discount of around 20cts/bbl to the quotations on an FOB basis.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB China basis weakened. Selling pressures were strengthening on sellers as talks on cargoes loading in April were coming close to an end. It was reported that an MR-size cargo each of 0.001% sulfur gasoil was traded on Tuesday at a discount of $1.10/bbl to Singapore quotations on an FOB North China basis and at a discount of $1.00/bbl to the quotations on an FOB South China basis. Meanwhile, no fresh cargoes were seen from Japan and South Korea. Only a Middle East-based trader with cargoes from some South Korean refiners seemed to have around two MR-size cargoes for sale loading at the end of April.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. Hyundai Oilbank in South Korea determined to import some volumes of VLSFO from Singapore. One of market players in South Korea mentioned that productions of VLSFO were short and they decided to import the fuel. As reported, the company was seen to resell the imported fuel. In the meantime, Formosa Petrochemical Co (FPCC) in Taiwan has been still in turnaround for its residue fluid catalytic cracking unit (RFCC) at their refinery until early April, so that they were not planning any further tenders to buy and sell fuel oil for April at present.

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