Gasoline: Markets steady with tight supply

In talks on gasoline, market sentiment for oxy and non-oxy was strong. In Northeast Asia, exports from China seemed to remain few, one of the main exporters of oxy grade gasoline. In the country, the government had issued the third batch of export quotas of oil products in mid-September, but there were views that the total amount of 8.39 mil mt in the year would not be enough for oil companies. Thus, they were expected to focus on exports of jet fuel, and those of other refined products including gasoline seemed to be limited. In the region, several oil companies such as SK Energy in South Korea and CPC Co in Taiwan planned regular maintenance of residue fluid catalytic cracker (RFCC).

In Southeast Asia, PRefChem shut down operations of crude distillation unit (CDU) on Oct 8. Due to the outage, the refiner reportedly postponed restarting at least one RFCC in November.

Naphtha: PRefChem seeks naphtha due to CDU shut

The second half November open-spec naphtha prices on a CFR Japan basis were stable on week. There was a sign that demand would increase due to shutdown of the refining unit. A market source mentioned that PRefChem in Malaysia shut down operations of its 300,000bbl-per-day crude distillation unit (CDU) but did not plan to shut its naphtha cracker down with an ethylene production capacity of 1.20 mil mt-per-year (mt/y). Meanwhile, it was heard that the company was seeking naphtha in the spot market as production volumes of naphtha from the refining unit were expected to decrease. In China, BASF was reported to be scheduled to start up its new naphtha cracker at the end of this year. According to a market source, the petrochemical company would start up derivatives facilities in November before the new naphtha cracker. According to a market source, a part of players targeted to sell naphtha to the company.

In the spot talks, Wanhua Chemical in China bought 55,000mt of light grade naphtha for delivery into Yantai on Nov 10-25 at a premium in the range of $8.00-9.00/mt to the second half of October on a CFR basis.

Middle distillates: High flash point Oct cargoes for US traded at high price

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis became bullish. A market source said that market sentiment was strong. Some cargoes with the high flash point loading in October that could be brought into the US West Coast from Northeast Asia were traded. A market source said that several high flash point cargoes from South Korea and Japan seemed to have been done by this week at a premium in the range of $2.00-4.00/bbl to the quotations on an FOB basis. As reported earlier, a fire broke out at Chevron's 285,000b/d El Segundo refinery in California last week, and some secondary units were shut down. Because of this, supply of jet fuel was declining in the region, and demand of high flash point jet fuel from Asia was increasing.

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB South Korea basis and on an FOB Taiwan basis became bullish on tight supply/demand fundamentals. With supply of high sulfur gasoil in Northeast Asia declining, supply from Russia was also disrupted. On Wednesday, Formosa Petrochemicals CO (FPCC) in Taiwan sold an MR-size cargo of 0.05% sulfur gasoil loading on Nov 14-18 via a tender at a discount of around $1.70/bbl to the quotations on an FOB basis.

Fuel oil: High Singapore inventories cause ample supply in Asia

The differential for MR-size cargoes of 0.5%S fuel oil on an FOB South Korea basis was unchanged. However, market sentiment remained soft as a sense of ample supply lingered in the region. Supply/demand fundamentals in Asia were slackening on the back of high inventories of low-sulfur fuel oil. A market source said that around 4.00 mil mt of high and low sulfur fuel oil combined had flowed into the region in August and September.

In Northeast Asia, SK Energy in South Korea seemed to have surplus cargoes of 0.5%S fuel oil for export loading in November. The company planned to have turnaround of the 95,000b/d residue fluid catalytic cracker (RFCC) at its 840,000b/d Ulsan refinery from mid-October to early-December.