Gasoline: One JPN refiner plans to buy Sep cargo

　The differential for MR-size cargos of 91RON gasoline on an FOB South Korea basis was unchanged on week. In Taiwan, CPC Co was scheduled to have regular maintenances at their refinery from late September, which would limit available cargoes for exports. In the spot talks, one Japanese refiner planned to buy one MR-size cargo loading in September.

　The differential for SR-size cargoes of 91RON gasoline on an FOB South Korea basis went up. Demand was steady from Japan, one of the main outlets for cargoes from South Korea. In addition, oil firms in South Korea might have limited available cargoes for exports in September because they had struck term supply contracts or planned maintenance activities of their refineries.

Naphtha: FPCC continues two-units operations

　Market sentiments for the second half September open-spec naphtha prices were soft. In the market, a small trouble of a naphtha cracker happened and one South Korean company reduced productions of petrochemicals and the market sentiment slightly became softer. Lotte Chemical Indonesia shut down its naphtha cracker on last Thursday. According to a market source, the company was likely to skip buying naphtha for delivery in the second half of September. In South Korea, YNCC shut down its No.3 naphtha cracker due to poor profitability on last Friday. While the company would raise the operation rates of the other two naphtha crackers, whole production volumes decreased.

　Formosa Petrochemical Corp (FPCC) in Taiwan was conducting turnaround at its 1.03 mil mt-per-year (mt/y) No.2 ethylene unit from mid-June. The maintenance was scheduled to continue until Aug 25. After the restart of No.2, it would shut down its 700,000mt/y No.1 ethylene unit. It planned to continue two-unit operations with No.2 unit and 1.20 mil mt/y No.3 ethylene unit. The average operation rates of ethylene units were expected to be maintained for a while, and there seemed to be no impact on naphtha markets.

Middle distillates: 0.05% sulfur gasoil market softens on retreating demand

　The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis was unchanged. Spot sales of September loading cargoes by Taiwanese oil companies were not expected. Formosa Petrochemical Corp (FPCC) was planning turnaround of the 76,000b/d residual fuel oil fluid catalytic cracker in September at its 540,000b/d Mailiao refinery. As a result, the company would reduce operation rates of the refinery, leaving no surplus capacity for jet fuel. Additionally, as previously reported, CPC was also planning to procure at least one MR-size cargo of September cargo due to regular maintenance of its refinery.

　The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis went down. Strong selling pressures amid declining demand became a bearish factor.

　Formosa Petrochemicals Co (FPCC) in Taiwan sold an MR-size cargo of 0.05% sulfur gasoil loading on Sep 15-19 via a tender. The market showed a downward trend. Some market sources pointed out that the demand was weak. Vietnam, one of the major destinations of Northeastern 0.05%S cargoes, was in the middle of its rainy season. Demand for gasoil was reducing and buying interest became weak. And congestion of ports in this country also dampened buying interests.

　The European Union imposed economic sanctions on oil products from Nayara Energy, of which stakes Russia's Rosneft holds, and it was also difficult for other Indian oil companies to ship their oil products to Europe. Meanwhile, the US government criticized India for purchasing large amounts of Russian crude oil and set high tariffs on imports from India, which also had an impact. It was possible that Indian products would flow to Africa and Asia rather than Europe going forward, and it was also forecast that this could lead to loose supply/demand fundamentals in Asia.

Fuel oil: Purchase surfaces from Japan

　The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. However, market sentiment stayed weak as a sense of ample supply lingered in the region.

　In South Korea, S-Oil was likely to be planning to sell some low-sulfur fuel oil cargoes including slurry oil in the near term, but no actual movements were witnessed. In Japan, ENEOS seemed to have been moving to sell fuel oil cargoes, but no deals were confirmed. The company had sold several fuel oil cargoes loading in July and August to Singapore, and that became one of the factors of oversupply in the country. As reported, several troubles of secondary units were taking place at its refineries and the company had surplus volumes of fuel oil.

　Idemitsu Kosan, on the other hand, had also been moving to procure 0.5% sulfur fuel oil for September, but no deals were heard. Its subsidiary 120,000b/d Seibu Oil had been permanently shut down at the end of June last year, and its supply of fuel oil in West Japan was running short. Thus, Idemitsu reportedly continued moving to buy low-sulfur fuel oil cargoes. Its 165,000b/d Aichi refinery was also scheduled to have turnaround from September to December.