Gasoline: Non-oxy grade prices shoot up

The differential for MR-size cargos of 91ON gasoline on an FOB Northeast Asia basis strenghtened. Purchases for cargoes to Australia, where demand in summer was increasing, were intensive. This week, in Northeast Asia, several refiners moved on sales of spot cargoes loading in December.

Naphtha: Prices down on weak demand

The second half December open-spec naphtha prices on a CFR Japan basis declined. In South Korea, one of the importing countries of naphtha, demand was considered to be weak in December, the end of the fascial year. In the meantime, refineries were expected to increase the operation rates because refining margins were recovering. On the other hand, buying interest from South Korea was prospected to increase for cargoes for delivery in January.

One South Korean company bought heavy full range naphtha for delivery in the second half December vie a tender. The traded prices for A grade and C grade were respectively at a premium of $10.50/mt and a premium of $5.75/mt to Japan quotations on a CFR basis. One Japanese petrochemical company struck an annual term contract in 2025 at a premium of around $1-2/mt to the quotations to be assessed 45 days before on a CFR basis.

GS Caltex in South Korea was having turnaround at its naphtha cracker until around Nov 29. The company was reportedly expanding the ethylene production capacity with this maintenance. In the country, new ethylene derivative facility by a joint venture such as GS Caltex was scheduled to start operations up in the second half next year. GS might probably cap the operation rates of the naphtha cracker in order to adjust ethylene productions before the new derivative facility started operations.

Middle distillates: Weak buying interest pushes kerosene prices down

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis was unchanged. A wait-and-see mood seemed to be prevailing in the spot market. According to a market source in the US, the arbitrage window between Asia and the US remained open although the window had slightly narrowed compared to before.

The differential for SR-size cargoes of kerosene on an FOB South Korea basis became weaker on week. Inquiries from Japan, a main outlet from South Korea, were decreasing. In Japan, stock levels of the fuel were increasing because of the warm temperature and steady operations of refineries.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis softened. Buying interest of Chinese buyers for early December cargoes were winding down. China-based companies had temporally purchased cargoes in international markets as exports volume was so thin from the country. One South Korean oil firm sold one MR-size cargo of 0.001% sulfur gasoil for Dec 10-12 loading through a tender closed on Thursday. The price was at a discount of 30cts/bbl to the Singapore quotations on an FOB basis. South Korean refiners were keen to sell December-loading spot cargoes due to current strong crack margins.

Fuel oil: Prices soften amid expectations for increasing supply

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis went down with prospects that supply would grow. In South Korea and China, some oil firms were apparently inclined to increase their yield rates of 0.5% sulfur fuel oil at refineries, whose refining margins were more firm than other petroleum products. Most of the firms focused on the bunker fuel market to ship 0.5% sulfur fuel oil, whereas a few firms exported 0.5% sulfur fuel oil by cargoes. Thus, selling pressure was gradually mounting in Northeast Asia, too. In addition, Nigeria's 650,000-barrel-per-day Dangote refinery purportedly shipped about 4‐5 cargoes, or 600,000/mt or mover of 0.5% sulfur fuel oil loaded mostly on a Suezmax-tanker every month. Some of them were exported to Asia, contributing the excess supply in the area.