Gasoline: Sales emerge from Japan

The differentials for MR-size cargos of non oxy gasoline on Northeast Asia basis weakened. While talks on cargoes for mid or late November-loading were starting, backwardation was concerned. In the spot talks, one MR-size cargo of 92RON gasoline loading in the first half of November was traded.

Meanwhile, another cargo loading in late November was being sold from Japan in the spot market. In the country, Idemitsu Kosan had been in an export position from talks on October-loading. On the other hand, ENEOS was expected to be in an import position because the refiner was conducting regular maintenance activities including the crude distillation unit (CDU) at the 249,100bbl-per-day (b/d) Kawasaki refinery.

For Cosmo Oil, on the other hand, the refiner had delayed restarting operations of the 100,000b/d CDU at the Sakai refinery, but did not need to move on buying prompt cargoes. The oil company was heard to have no plan to import cargoes for a while. No deal by Taiyo Oil was heard, either.

Naphtha: Market weighed on sluggish fundamentals

The second half November open-spec naphtha prices on a CFR Japan basis were stable on week. Market sentiment was weighed because there was a sign of sluggish supply/demand fundamentals.

While the operational rates of naphtha crackers were under downward pressures due to poor production margins of olefins, the arbitrage cargoes tended to increase from other regions. A market participant mentioned that a part of sellers had available cargoes for offers and was looking for their outlets.

Meanwhile, there were procurements for LPG as petrochemical feedstocks because the price gap between naphtha and LPG was wide. Hanwha TotalEnergies (HTC) in South Korea was opening a buy tender for propane for delivery in the second half of November and butane for delivery on Nov 11-30. HTC requested sellers to show offers for butane linked to the naphtha quotations.

Middle distillates: Jet market goes up on uncertainty over Chinese exports

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis strengthened. Exports from China going forward were uncertain. Meanwhile, inquiries were increasing due to the start of the heating season, and supply/demand fundamentals were getting tight. As previously reported, China's Rongsheng Petrochemical had already sold one MR-size cargo loading on Nov 7-9 at a premium. Sales by other oil companies did not surface. Exports from China were still uncertain after the US government notified that it would impose sanctions on Chinese independent refiners and oil terminals purchasing Iranian crude oil. Because of this, buying interest appeared to be increasing for cargoes to be loaded in other countries such as South Korea.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis went up. The upward pressures strengthened in the market due to thin supply in Northeast Asia. GS Caltex in South Korea closed a tender to sell of 0.001% sulfur gasoil. Meanwhile, spot cargoes were scarce in the market as some refineries in South Korea and Taiwan were closed for turnaround.

Fuel oil: Sales of spot cargoes expected to decline in and out of Asia

The differential for MR-size cargoes of 0.5%S fuel oil on an FOB South Korea basis was unchanged.

However, talks in the spot market were at a standstill as no cargoes were confirmed in Northeast Asia. As reported, due to poor refining margins of low-sulfur fuel oil, refiners were reluctant to sell spot cargoes In addition, refineries in and out of Asia, who had actively sold cargoes, were expected to reduce their sales of cargoes going forward.

In Southeast Asia, Pengerang Refining Company Sdn Bhd and Pengerang Petrochemical Company Sdn Bhd (PRefChem) in Malaysia stopped the operations of the 300,000b/d crude distillation unit (CDU) due to glitch. Also, the 650.000b/d Dangote refinery in Nigeria resumed the operations of the residue fluid catalytic cracker (RFCC). For this reason, cargoes sold from these refineries would be limited going forward.