Products: Jan 27-31: Gasoil prices down as Feb-demand from other areas almost over.
Gasoline: 92RON prices down on retreating trader's buying interest The differentials for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis declined as a sense of oversupply was prevailing. Inventories in Europe had climbed to the historical high level, and those in Singapore also stood high. Meanwhile, traders were reluctant to procure fresh cargoes. One oil firm in South Korea proved to have sold an MR-size cargo of 92RON gasoline loading in late February at a discount of $2.70/bbl to the quotations on an FOB basis. On the demand side, Pemex in Mexico had reportedly bought jet fuel and 92RON gasoline loading in February in Asia, but it did not seem to affect the market due to its small quantity. However, an expectation emerged that procurements would surface to gasoline because the prices were getting down in a short period. The 300,000b/d Pengeran refinery in Malaysia stopped the operations of the residue fluid catalytic cracker by Jan 28. It was not clear when it would restart or the impacts of the shutdown on the market.
Naphtha: Expectation for fewer supply pushes up price The first half March open-spec naphtha prices on a CFR Japan basis went up. Supply was expected to decrease. In a part of countries like South Korea, the operation rates of refineries were said to go down. In the meantime, it was probable that delivery for cargoes to Japan in February would be delayed from the Middle East. One Japanese petrochemical company bought one 25,000mt cargo for delivery on Mar 1-15 at a premium of around $5.00/mt to the quotations to be assessed 30 days before on a CFR basis via a tender. On the other hand, inquiries from Southeast Asia remained weak and a rise in prices was only marginal. JG Summit in the Philippines shut down its 480,000mt-per-year ethylene plant from early this month. The shutdown was initially expected to last until March. However, it was reported later that the shutdown seemed to last indefinitely. According to a market source, the company was considering to retreat from its petrochemical business. In the region, Long Son petrochemical in Vietnam and Lotte Chemical Titan in Malaysia were shutting down ethylene plant. Idemitsu Kosan in Japan resumed its 370,000mt-per-year ethylene facility at the Chiba plant during Jan 25-26. According to sources, the facility shut down operations by around Jan 10 due to maintenance for a glitch.
Middle distillates: Market sentiment in EU and the U.S calming down The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis were unchanged. Trades lacked momentum on week. The differential for SR-size cargoes of kerosene on an FOB South Korea basis was stable. In Japan, a main outlet from South Korea, demand for the fuel was retreating as the temperature went up. A part of trading houses had surplus cargoes which had been initially scheduled to be domestically sold in February. It was heard that demand in Hokkaido was weaker than expected. Although South Korean oil companies had limited availability for sales, buying interest was expected to be weaker from Japan. The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis weakened. In South Korea, one oil firm sold one MR-size loading on Feb 24-28 through a tender closed on Monday. The price was at a discount of $1.10-1.20/bbl to the quotations on an FOB basis. A trader who had tanks in South Korea still appeared to have Feb products for sale. Buying interest was weak as inquiries from Australia, New Zealand and South-East Asia for February products were almost over. The market also weakened with market in Europe and the U.S. also calming down. Markets in Asia had temporarily been boosted until the first half of January due to increased demand for heating on the back of the cold weather and economic sanctions on Russan products by the U.S. However, the recent relatively mild weather was expected to ease supply/demand fundamentals. It was possible that more Middle Eastern and Indian products might flow into Asian markets going forward.
Fuel oil: Transactions become thin on CNY The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis was unchanged from a day before. Talks on fuel oil cargoes were limited across Asia as some markets including China and South Korea were closed for the Lunar New Year holidays. In addition, impacts of the sanctions on Russian products by the US seemed to be receding in the market, and less market players were likely to be concerned about tight supply. A market source in South Korea recently said that it was possible for sellers in South Korea to move on exports of cargoes as the bunker market was deteriorating.
Market News As of Jan 30, imported gasoline prices and kerosene prices from South Korea to Japan which the government subsidy was deducted from were much lower than waterborne prices and truck prices in Japan. Prices for both fuel in Asia stayed low. It was favorable for Japanese refiners and trading houses to import them.
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