Products: Jul 12-16:Naphtha steady on firm gasoline market
The differentials for MR-size cargoes of 92RON and 93RON gasoline on an FOB Northeast Asia basis went up on declining supply. As exports from China were decreasing, a sense of tight supply was strong in Asia, and prices in Singapore were increasing. In addition, some troubles at secondary units at refineries in the Middle East and India were reported. Therefore, exports from the regions were few, and less cargoes were flowing into Asia. On Tuesday, Formosa Petrochemicals Co (FPCC) in Taiwan sold two 250,000bbl cargoes of 93RON gasoline loading in August at a premium of around $1.30/bbl to Singapore quotations on an FOB basis.
In the Northeast Asian spot market, a South Korean end-user was confirmed to have bought cargoes. Last weekend, SK Energy seemed to have purchased heavy full range naphtha for second-half August delivery. A Northeast Asian end-user said that prices of heavy full range naphtha as feedstock of gasoline whose markets were firm were slightly firming up. As reported, Mitsui Chemical was informed to have been seeking naphtha. It was cited that the company was making moves due to shortage of supply from the 168,000b/d Kashima refinery of ENEOS which has been shut down owing to power failure.
The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB North Asian were unchanged. However, sluggish demand capped the market. As COVID-19 was still spreading out in Southeast Asia, demand in the region was declining and spot imports were weakening. Meanwhile, as the fishing ban was approaching across the coast of mainland China, demand of gasoil for vessels off the coast of Taiwan was also sluggish. Refiners in South Korea were still increasing exports of 0.05% sulfur gasoil as demand of light cycle oil (LCO) in China was going down. On Tuesday, GS Caltex in South Korea closed a sell tender for five MR-size cargoes loading on Aug 16-20, Aug 19-23, Aug 22-26, Aug 24-28 and Aug 26-30. Although details were unknown, some cargoes may have been done at a discount of around $2.00/bbl to Singapore quotations on an FOB basis and would be brought into Vietnam.
The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In South Korea, SK Energy was keeping offering VLSFO for bunker at very competitive prices vibrantly, and the company was planning to sell the whole volumes not for 0.5% sulfur fuel oil but for VLSFO whose prices are relatively higher even in second-half July owing to the abundant inventory levels. Due to this, supply of VLSFO was ample in the market, however, the differentials of the fuel for bunker were conducting steady because of high premiums for imports to the country. As premiums of 0.5% sulfur fuel oil were at the same level as VLSFO, the prices on an FOB South Korea basis were supported as well.