Gasoline: Purchases for cargoes for Mexico increasing

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia was unchanged on week. However, market sentiment stayed firm as purchases for cargoes for regions outside Asia were increasing. While regular maintenance activities of refineries were getting intensive in the West toward September and October, Mexico's state-owned Pemex was increasing its procurements of gasoline in Asia. The company had reportedly bought four or five MR-size cargoes of 92RON and 95RON gasoline loading in early September in Singapore. The company was said to have procured eight MR-size cargoes loading in August. In Asia, Petrolimex in Vietnam conducted a tender to buy two MR-size cargoes of 95RON gasoline loading on Sep 10-16 and Sep 18-20 and closed it on last Tuesday. Meanwhile, PetroChina, one of the main exporters of the fuel in the country, was planning to export 170,000mt in September and the total export volumes in the country in the month could be less than 500,000mt. China National Offshore Oil Co (CNOOC) would skip any sales of gasoline from its 440,000b/d Huizhou refinery in September. Demand in Southeast Asia remained sluggish and gasoline crack margins over Dubai crude il were sharply narrowing.

Naphtha: 1h Oct cargo traded at premium of below $4

The first half October open-spec naphtha prices on a CFR Japan basis went down on strong selling interest. Japan's Resonac bought one 25,000mt cargo of open-spec naphtha for delivery in the first half October at a premium below $4/mt to the quotations to be assessed 30 days before on a CFR basis. A seller reportedly had surplus cargoes.

In Shandong in China, Wanhua Chemical's 1.20 mil mt-per-year No.2 naphtha cracker and Shandong Yulong Petrochemical' 1.50 mil mt-per-year naphtha cracker were scheduled to start the operations at the end of this year, it was reported. Wanhua reportedly planned to start the operations at its propane dehydrogenation unit (PDH) in October. Although details were unknown, Wanhua seemed to have already secured feedstocks.

Middle distillates: Strong selling interest from Korea causes softer 0.001%S GO market

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis strengthened. Strong buying interest pushed up the market. GS Caltex in South Korea sold an MR-size cargo loading on Sep 26-30 via a tender closed last Wednesday. It was pointed out that continuous buying interest by Japanese refiners might be a bullish factor for the market, but details were unknown. Meanwhile, SK Energy was not moving to sell any additional cargoes loading in September. The company had earlier old a cargo loading on Sep 17-19 and stayed in a wait-and-see stance since then. S-Oil Co and Hyundai Oilbank were not planning to sell any cargoes loading in the month and were scheduled to sell some in October onward.

BP announced last Friday that the company had signed an investment agreement with Jiaao Enprotech, a Chinese biofuel oil producer. The agreement called for an investment to acquire a 15% stake in Lianyungang Jiaao Enproenergy, a subsidiary of Jiaao Enprotech. Lianyungang Jiaao Enproenergy is currently building a 500,000 mt ton per year sustainable aviation fuel (SAF) plant in Lianyungang, Eastern China. The plant is scheduled to be completed in 2025 and will use the HEFA process, which uses cooking oil and other materials as a feed.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis fell down. Market sentiment was weak as selling interest from South Korea was strong in order to digest inventories at home. In addition, refiners in Japan resumed their spot sales for cargoes loading in September after turnaround of their refineries. Supply in Northeast Asia was increasing. In South Korea, a trader sold an MR-size cargo loading on Sep 21-25 from Onsan. In the country, GS Caltex also sold an MR-size cargo of 0.001% sulfur gasoil loading on Sep 26-30 via a tender.

Fuel oil: Less supply helps LSFO prices go up

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis went up, due to a drop in supply pressures. A few South Korean oil companies were reportedly increasing their supply to the bunker fuel market while it suspended exports of low sulfur fuel oil (LSFO) cargoes with the market seeing strong demand in the past few days. Additionally, prices in Asia were apparently pushed up by less supply from non-Asia regions such as the Middle East where export volume was low at the moment.