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Weekly Summary

Products: Mar 29-Apr 2:Gasoline goes up, amid fire out some refineries

GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB South Korea basis went up. The differentials were pushed up on expectations that demand would pick up. Sources said that demand would increase in part due to several fires at refineries in Asia. A major refiner in Japan was making moves to procure gasoil. Some pointed out that the company had already procured some SR-size cargoes of 91RON gasoline loading in April. On the supply side, West Pacific Petroleum Co Dalian (WEPEC) in China seemed to have sold an MR-size cargo of 93RON gasoline loading from the end of April to early May this week.

Also, as reported, while the outbreak of COVID-19 was setting down, demand from Southeast Asian countries including Malaysia or Vietnam was increasing.

 

NAPHTHA

In the Northeast Asia spot markets, a buyer in Japan was confirmed to have purchased high paraffine content naphtha for mid-May delivery. A Northeast Asian market source noted that the deal level was relatively too much high as the grade was high paraffine content, but the differentials for naphtha on a CFR Japan basis did not soar up actually. On the back of that, it was cited that ENEOS shut its Wakayama refinery due to a fire accident and the naphtha supply to domestic markets was tight, so that procuring spot cargoes needed even if the price level was relatively high.

LG Chem in South Korea shut its 230,000mt/year naphtha cracker at Daesan on Mar 28. The restart for operations was scheduled to be on Apr 10. An oil company in Northeast Asia saw that the loss of demand would be for one naphtha cargo.

Meanwhile, Although the containership which ran aground in the Suez Canal was re-floated and restarted sailing there, naphtha product ships loading four naphtha cargoes were still being disrupted. The one cargo was for SK Energy, and the rest three cargoes were for Japan.

 

MIDDLE DISTILLATES

The differential for MR-size cargoes of jet fuel on an FOB North Asia basis weakened. Most market players had already finished talks on cargoes loading in April, and were shifting to those in May. However, some suppliers with cargoes from South Korea loading in April still had a hard time digesting them. As freight rates for cargoes were increasing on the back of the stranding of a large container vessel at the Suez Canal, sales for cargoes to be brought into Australia from South Korea seemed to be becoming hard. For a fire which broke out at Indonesia's state-owned Pertamina's refinery on Monday, it had yet to be reported that the company or traders were making moves to look for cargoes of middle distillates. Sources said that impacts of the fire on the market could be only marginal. On the contrary, some pointed out that ample cargoes from China could cap the market for cargoes loading in May onwards.

 It was reported that Japan's largest refiner seemed to be looking for gasoil cargoes. At Monday noon, a fire broke out at a fluid catalytic cracker at the 127,500barrels-per-day Wakayama refinery in West Japan, and all units at the refinery were still shut down. It was not clear when the refinery would be restarted. Because of this, a combined 737,000bbl of crude distillation units of ENEOS, six CDUS out of 15 across the country, was shut down. The shutdown ratio added up to 39.5%. It was likely that the refiner was making moves to cover some volumes which were running short.

 

FUEL OIL

The differential for MR-size cargoes of LSWR on an FOB Indonesia basis was unchanged. An Indonesian state-owned company, Pertamina occurred a massive fire at its 125,000b/d Balongan refinery on Monday, and the company shut the refinery to prevent from spreading the fire with unknown schedule to recover. The refinery was producing decant oil (DCO). A market player viewed that Pertamina published that there was no problem to supply and stocks for oil products were enough, but it would possibly be a bullish factor for prices of low sulfur fuel oil if supply of the feedstocks were disrupted.

Asia-products(Japanese) report sample

Products (English) report sample

Tokyo : Products Team  Satoko Waki   +81-3-3552-2411Copyright © RIM Intelligence Co. ALL RIGHTS RESERVED.