Gasoline: CPC purchases additional cargo

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis was unchanged on week. In the spot market, CPC Co in Taiwan was moving to buy additional cargoes for the month through a tender which was scheduled to close on Tuesday. Via the tender, the company would buy 250,000bbl of any of 92RON, 95RON or 98RON gasoline for delivery on Sep 15-30. The price validity date was set on Sep 6. In late July, the company shut down the 80,000b/d residue fluid catalytic cracker (RFCC) at its 350,000b/d Talin refinery for a trouble.

Naphtha: Premium weighed down with oversupply

The second half October open-spec naphtha prices on a CFR Japan basis went down. The premium was weighed down with oversupply. Margins of olefins as a whole did not recover fully and there was no sign that the operation rates of naphtha crackers would increase. In the meantime, oil companies reportedly tended not to store naphtha as a gasoline raw material because the gasoline markets were getting down. The awardable prices for open-spec for delivery in the second half October was said to be at a premium of more than $2.00/mt to the quotations to be assessed 45 days before on a CFR Japan basis.

One South Korean petrochemical companies bought naphtha for delivery in the second half October and the first half November via a tender. The awarded price for the first one was at a premium of $3.00/mt to the quotations to be assessed 30 days before and that for the second one was at a premium of $1.00/mt to the quotations to be assessed 45 days before on a CFR basis.

In Japan and South Korea, a part of refineries seemed to start considering to reduce the operation rates of the residue fluid catalytic cracker (RFCC) due to declining gasoline markets. A market source said that supply for propylene would decrease when the operation rates of RFCC would be cut.

Middle distillates: Prices for jet fuel down but those for gasoil up

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis declined. Increasing supply from Northeast Asia pushed down the market. In the Singapore paper swaps market, regrade, the price gap between jet fuel and gasoil, hovered in the positive territory at the moment, and refiners in the region especially in China, were increasing spot sales of jet fuel.

Spain's major airline Iberia Airline will use 5% sustainable aviation fuel (SAF) in its group company's engine test facilities. Spain-based oil company Cepsa will produce and supply more than 360,000mt SAF. The refiner will use organic waste and used cooking oils as raw materials of SAF.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB went up. Decreasing sales volumes and weaker freight rates were perceived as bullish factors. Sales volumes decreased mainly from China as the third batch of export quotas was limited and Chinese oil companies increased their sales for jet fuel instead of gasoil because gasoil prices for September contracts had been weaker than jet fuel oil in the Singapore futures market and profitability of selling gasoil cargoes had declined. In the meantime, the freight rates turned to fall down again and it led the prices on an FOB basis up, market sources mentioned.

Fuel oil: Asia's VLSFO remains firm

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was flat on week. No fresh discussions were witnessed despite the period coming for October loading cargoes. In Asia, the refining margins and the differential for very low sulfur fuel oil (VLSFO) were recently drifting on a solid note, whereas the gasoline market was soft. Under the circumstances, "Some oil firms were likely to lower operation rates at their residue fluid catalytic cracking (RFCC)." said a market participant from South Korea's oil firm. A few players started to anticipate bunker fuel supply to tighten in Northeast Asia.