Gasoline: RFCC glitches continue at PRefChem

　The differentials for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis were unchanged. However, market sentiment remained firm due to buying interest in Southeast Asia and limited sales from China.

　In Malaysia, PRefChem continued to have glitches at the two residue fluid catalytic crackers (RFCC) at its 300,000bbl-per-day refinery. The refinery stopped operation works of the two RFCCs as of Wednesday. It was heard that it might target to restart one of them, but details of those status were unclear. In Africa, Dangote refinery in Nigeria could not smoothly operate RFCCs and it became one of the bullish factors for the market.

　In talks on non-oxy gasoline cargoes, there were recently few sales cargoes in the spot market. A market participant pointed out that production volumes were expected to decrease because of turnaround at refineries in South Korea and Taiwan, so that sales volumes might be limited in talks on November-loading cargoes.

Naphtha: Olefins market weighed

　Trading of the second half November open-spec naphtha trade started. Decreasing supply from Russia continued to put upward pressures on the market. In addition, supply for gasoline was also expected to be thin from Russia. Thus, demand for the material for gasoline blending was pointed out to increase in other regions as well.

On the other hand, in talks on olefins, market sentiment for ethylene was getting softer because of a sense of oversupply. It was pointed out to be a bearish factor that some ethylene cargoes loading in the US were traded for Northeast Asia. Prices for propylene and butadiene were capped as well. Thus, a market participant concerned that the operational rates of naphtha crackers might go down going forward.

In the spot market, Hanwha TotalEnergies (HTC) in South Korea bought full range naphtha for delivery in the second half of November. Meanwhile, it was heard that Trafigura sold at least one arbitrage cargo. In Southeast Asia, Lotte Chemical Indonesia was heard to procure naphtha that would be supplied from no-commercial tanks.

Middle distillates: Jet market falls on increasing supply from China

　The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. Sales of October cargoes by Chinese refiners gained momentum, and a sense of ample supply emerged.

　In Japan, one MR-size cargo loading in late October from a refinery in West Japan was reported traded at a deep discount to the quotations on an FOB basis. Refineries in West Japan did not have any plans for regular maintenance activities of crude distillate unit (CDU) in October onward, and operations of refineries were relatively stable. With kerosene demand not yet fully ramping up, this was likely to create capacity for exports.

　The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis were unchanged on week. In South Korea, SK Energy was scheduled to shut down the 170,000b/d No.3 crude distillation unit at its Ulsan refinery from mid-October would last for about a month. Exports by the company in November were expected to be at around the same volumes as in October. The company seemed to have sold several MR-size cargoes of 0.001% sulfur gasoil loading in October. The company did not sell any 0.05%S grade loading in the month, but a market source speculated that SK could move on sales of some 0.05% sulfur gasoil loading in November. However, it was not clear if the company was already moving to sell them now. Sales from the company were likely to be temporary halted due to the long holidays starting on Oct 3.

In Japan, ENEOS was possibly going to keep exports due to favorable profits of exports of the fuel. Operations of the company's refineries were said to be smooth as of now.

Fuel oil: Russian cargoes decreasing supports the HSFO market

　The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB Japan basis was unchanged. However, supply of HSFO decreased in part due to attacks on refineries in Russia from Ukraine. A market source pointed out that refiners moved to procure HSFO for feedstock of their refineries, and it underpinned the market.

On Sep26, Kansai Electric Power Co (KEPCO) in Japan announced that it would sequentially stop the operation of No.1 and No.2 unit at its Gobo oil-fired thermal power station. The shutdown dates were set on Oct31, 2025 at No.2, and Jun 30,2026 at No.1. A market participant was paying attention to whether decreasing domestic demand would get faster with abolition of the power station. Fuel oil demand in Japan was expected to gradually decrease.