Gasoline: PetroChina and FPCC sell late Aug cargo

The differentials for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis went down. In Southeast Asia especially in Singapore, there was a sense of loose supply/demand fundamentals. In Singapore, refineries were reportedly running without troubles and were raising operation rates. In the meantime, the winter off-demand season started in countries in the southern hemisphere such as Australia and New Zealand. PetroChina sold one MR-size cargo of 92RON gasoline loading in Japan in late August. In Taiwan, Formosa Petrochemical Corp (FPCC) sold one LR1-size cargo of 92RON gasoline loading in late August. On the other hand, no fresh sales for August-loading were heard from CPC Co. CPC's 350,000bbl-per-day (b/d) Talin refinery was shutting down its 80,000 b/d residue fluid catalytic cracker (RFCC). The oil firm targeted to restart it on Jul 17. Due to the trouble, CPC reportedly had bought at least one prompt cargo for delivery in early-July.

Naphtha: More US cargoes weigh on markets

The second half August open-spec naphtha prices on a CFR Japan basis unchanged on week. Supply of both heavy grade and light grade was reported to be ample from the US to Asia. According to a market source, volumes of light grade naphtha that were able to be stocked in a storage tended to be decreasing under higher temperatures in summer because of restriction of RVP (Reid Vapor Pressure) in the US. On the demand side, one Japanese petrochemical company subdued the operation rates of its facilities, so that it did not need to buy cargoes in the spot market. In the meantime, specific gravity of delivered naphtha cargoes was recently heavier than last year. A market source believed that demand for naphtha as a gasoline raw material seemed to be weaker than last year despite of the gasoline demand season in northen hemisphere. In this situation, another market source paid attention which feedstocks among naphtha, LPG and ethane would be imported or used by Chinese end-users.

Middle distillates: Gasoil market goes up while Japanese refiner sells early Aug cargo

The differential for MR-size cargoes of jet fuel on an FOB South Korea basis went up. On the back of high crack margins of gasoil, oil companies were increasing the yield of gasoil, and productions of jet supply were declining. In addition, some oil companies were turning to a buying position due to refineries hiccups, which was tightening supply/demand fundamentals. In Taiwan, Formosa Petrochemicals Co (FPCC) sold one 300,000bbl cargo loading on Aug 10-14 through a tender. CPC Co closed a tender to buy 300,000bbl for Aug 1-10 delivery.

The differentials for MR-size cargoes of 0.001% sulfur gasoline strengthened on tight supply of August cargoes. A refiner in Japan sold an MR-size cargo loading in early August. Besides the cargo, supply in Northeast Asis was still limited as Formosa Petrochemicals Co (FPCC) alone had sold August loading cargoes. There were views that gasoil supply was tight especially in Europe. Whereas consumptions of gasoil for diesel cargoes increased due to extremely hot summer, several refineries troubles were reported, so that market fundamentals easily became tight.

However, cargoes from the Middle East and India were headed to Europe with a route through the Cape of Good Hope as the Middle East situation was still unstable while Houthis continued their attacks on vessels that sailed in the Red Seas. Thus, cargo delivery to Europe was delayed.

Fuel oil: Sales from Taiwan continue

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. However, downward pressures strengthened on the market as supply was expected to increase. Compared to gasoline, market players found more profitability to refine 0.5% sulfur fuel il. Thus, some pointed out that refiners in the regions were possibly going to produce more 0.5% sulfur fuel oil. In the spot market, sales from Taiwan continued. CPC Co closed a tender to sell an MR-size cargo of 0.5% sulfur straight run fuel oil loading on Jul 21-25. The company had earlier sold an MR-size cargo of the same grade loading on Jul 10-12. Formosa Petrochemicals Co (FPCC) sold an MR-size cargo of 1.5% sulfur fuel il loading on Aug 7-9 through a tender.