GASOLINE

The differential for MR-size cargoes of gasoline on an FOB Northeast Asia basis was unchanged. Taiwan's Formosa Petrochemicals Corp (FPCC) planned to sell one to two 250,000bbl-size cargoes of 93RON gasoline for January loading. In Japan, domestic demand was dull and several refiners planned to sell surplus cargoes for January loading. ENEOS reportedly had room for sales of three to four MR-size cargoes for January loading similar to December loading. The company's 247,000b/d Kawasaki refinery suffered troubles at a 92,000b/d catalytic cracker on Nov 25. Because of this, the 77,000b/d No.3 crude distillation unit (CDU) was being shut down. Idemitsu Kosan apparently had three to four MR-size cargoes for January loading too. Meanwhile, a South Korean refiner had new available cargoes for December loading but deal information was not heard. In South Korea, a strike by Confederation of Trade Union was continuing and domestic shipments were disrupted. As a result, refiners were exporting surplus cargoes.

NAPHTHA

In the Northeast Asia spot market, the heavy full range naphtha market slightly softened. South Korea's GS Caltex was said to have purchased heavy full range grade for delivery to Yeosu in second-half January at a premium of $18.00-19.00/mt to Japan quotations. The company previously procured this grade at a premium of about $30.00/mt to the quotations. In South Korea, due to a prolonged strike by truck drivers, domestic supply/demand fundamentals of petroleum products including gasoline deteriorated and operation rates of refineries and naphtha crackers were low. In this situation, Korea Petrochemical Ind. Co. (KPIC) apparently reduced operation rates of its naphtha cracker from around 85% of capacity to around 70%. Meanwhile, in Southeast Asia, Malaysia's LOTTE Chemical Titan was conducting a buy tender for first-half January delivery light naphtha.

MIDDLE DISTILLATES

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis was softened. As more cargoes were sold from China loading in late December, buyers seemed to be inactive to procure cargoes loading in early January. In addition, inquiries for cargoes for Europe were also decreasing. As European countries would ban imports of gasoil from Russia from Feb 5 next year, last-minute demand was emerging and procurements of cargoes from Northeast Asia were going down. Meanwhile, a Middle East-based trader reportedly sold an MR-size cargo loading in mid-January from South Korea to an Oil Major at a discount of 70cts/bbl to the quotations on an FOB basis. The cargo was likely to be headed to Australia. Some refiners in Northeast Asia, however, were still moving on sales for cargoes loading in December. The refinery of Malaysia's RAPID project was conducting a tender to sell an MR-size cargo loading on Dec 23-25. It was scheduled to close on Dec 12. In addition, the Middle East-based trader mentioned above was said to have sold an LR2-size cargo loading in December from South Korea to East Africa. The price was reportedly at a discount of in the low $2's/bbl to the quotations on an FOB basis.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. South Korea's SK Energy sold out VLSFO for the bunker market for this year. The company was operating the Ulsan refinery only at 80-90% of capacity and had scarce room to export 0.5% sulfur fuel oil cargoes. Meanwhile, Taiwan's CPC closed a sell tender on Thursday for 26,000mt of slurry oil for end-December to first-half January loading. The validity was until Friday. CPC finished turnaround for a crude distillation unit (CDU) at its Talin refinery and restarted operations. But it was still suspending operations of a residue desulfurization unit (RDS) there. CPC was carrying out turnaround for a CDU at the Taoyuan refinery to finish in first-half January.