Gasoline: Pemex buys cargoes in Singapore

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Aisa was unchanged. While cargoes from the Middle East were increasing, export availability from Northeast and Southeast Asia were on the decline due to glitches or turnaround at refineries.

In this situation, Pemex in Mexico reportedly bought three MR-size cargoes of 92RON loading in Singapore in April. Due to emerging demand for other regions, the differential was pushed up in the Singapore market.

Export volumes for the fuel from China decreased this year. The total exports in Jan and Feb this year were 699,246mt, down by around 55.5% from 1.56 mil mt in same period last year. The average operation rates of independent refineries in Shandong remained at around 50%, so that state-owned oil companies prioritized domestic supply of gasoline and gasoil.

The exports in Mar and Apr this year were expected to be around 700,000mt per month, respectively. Refining capacity was expected to go down in the country due to maintenance season in spring. It was also expected that Chinese oil firms would carefully sell their cargoes in April because it was unclear when the second batch of exports quotations would be released.

Naphtha: Tight fundamentals retreat

The first half May open-spec naphtha prices on a CFR Japan basis softened. Tight supply/demand fundamentals retreated. Several end-users avoided procurements in the spot markets against the recent overheated markets. In addition, a market participant pointed out that procurements for new naphtha crackers in China would slow down for a moment.

One South Korean petrochemical company purchased two 25,000mt cargoes of open-spec for delivery in the first half May at a premium of $16.25/mt to be assessed 30days before and at a premium of $9.25/mt to be assessed 45days before to the quotations on a CFR basis via a tender closed on Mar 26.

Market prices for heavy grades naphtha were also capped by softer aromatics markets sentiment. One South Korean refiner bought a 25,000mt cargo to be loaded in Skikda for delivery in the first half of May at a premium of $24.00-25.00/mt to the quotations on a CFR basis via a tender closed on the same day.

Middle distillates: 0.001%S GO market down on more cargoes from ME and India

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went up. Expected increasing demand slightly pushed up the market. The arbitrage window from Asia to the US West Coast was about to open, and some purchases for cargoes to regions outside Asia were expected.

Buying interest for April-loading cargoes was surfacing in Japan. According to several market sources, Idemitsu Kosan was planning to buy at least one MR-size cargo for April loading. The company had already secured several cargoes for April loading bound for the US. The company was planning turnaround for some secondary units at its 195,000bbl-per-day Chiba plant from April onwards. Some traders pointed out that the planned maintenance was seen as one factor behind the purchases since supply would shrink.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Aisa basis went down. More cargoes from India were flowing into Australia, one of the main outlets for cargoes from Northeast Asia, and buying interest by Australian market players was weak. Most players had already secured cargoes from India, so that only a few players seemed to be interested in cargoes from Northeast Asia.

One South Korean company sold one MR-size cargo of 0.001% sulfur loading in the end of April at a discount of $1.15/mt to Singapore quotations on an FOB basis. This cargo was bounded to Singapore.

Fuel oil: HSFO market softens as slack fundamentals surface

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis softened as slack supply/demand fundamentals were emerging.

A market source said that more volumes were flowing into Aisa from Europe with LR-size vessels and a sense of thin supply in Asia was slightly eased. Inventories in Singapore were also on the decline. The source added that thin supply was expected to continue at least until early April.

On the other hand, there were also views that the upward pressures on the Asian market could be strengthened again as the arbitrage cargoes from Europe could go down going forward.