Gasoline: Some non-oxy cargoes for 2H Dec reported

The differential for MR-size cargoes of Northeast Asia basis were unchanged on week. Discussions were shifting to January loading cargoes, but most market players stayed in a wait-and-see stance as it was a little too early to start talks on them. Formosa Petrochemicals Co (FPCC) in Taiwan had finished regular maintenance activities of its refinery, and some volumes for spot sales in January. It would start sales of them. Meanwhile, some oil companies in Northeast Asia were still moving to sell cargoes loading in the second half of December. ENEOS had some volumes for sale.In China, PetroChina sold an MR-size cargo of 92RON gasoline with non-oxy grade. China National Offshore Oil Co (CNOOC) also sold 12,000mt of 92RON gasoline loading from Hainan at the end of December.

The differential for SR-size cargoes of 91RON gasoline on an FOB South Korea basis went down on week. The market was pushed down on increasing supply on the back of restarts of refineries after turnaround. On the other hand, demand in Japan, one of the main outlets for cargoes from South Korea, was weak in the winter off-demand season, and market players were inactive to import.

Naphtha: UNIPEC moves to buy Jan cargo

The differential for the second-half January on a CFR Japan basis was unchanged. China International United Petroleum & Chemicals Co (UNIPEC) closed a tender to buy 30,000-50,000mt of naphtha for delivery in Zhoushan in January and 30,000mt for delivery in Shanghai. Import quotas of naphtha in 2026 by the government were not known.

In the Middle East, turnaround of refineries was seen as almost over. Saudi Aramco Total Refining and Petrochemical Co (SATORP) finished regular maintenance activities of the 460,000b/d crude distillation unit, started resuming it this week. Meanwhile, Saudi Aramco Shell Refining (SASREF) was planning to resume operations of the 150,000b/d CDU in mid or late December. Thus, supply from the Middle East was expected to increase going forward.

LG Chem had restarted the operations of its 1.27 mil mt/year naphtha cracker in Daesan by Wednesday that had been shut down for turnaround from Oct 13 till Dec 2. The company bought open-spec grade naphtha in the first half of February and in the first half of March by Monday.

Middle distillates: Gasoil prices retreat amid expected supply increase

The differentials for MR-size cargoes of jet fuel on a FOB Northeast Asia basis were weakened

on slack supply/demand fundamentals in the region. In China, Sinochem sold an MR-size cargo loading on Dec 28-30 from West Pacific Petroleum Co Dalian (WEPEC)'s refinery through a tender. Sellers in China were increasing exports on the back of strong crack margins. No spot sales for cargoes loading in December and January were witnessed from South Korea. SK Energy in the country was scheduled to finish regular maintenance activities of turnaround secondary units at its 840,000b/d Ulsan refinery by the end of December, and its supply in January onward was possibly going to increase. In the meantime, the arbitrage window for cargoes from Asia to the US West Coast was narrowing, and inquiries for cargoes with the high flash point were on the decline.

The differentials for 0.001% sulfur gasoil went down. Refineries in Northeast Asia were resuming after turnaround one after another, and supply was expected to increase. ENEOS in Japan seemed to have sold three MR-size cargoes loading in Kawasaki and Mizushima at late Dec.

In addition to talks on spot cargoes, discussions on term contracts for next years were also ongoing. GS Caltex in South Korea reportedly cut term deals of 0.05% sulfur gasoil for 2026 at a discount of $1.50-1.60/bbl to the quotations on an FOB basis. The company had already sold term cargoes of 0.001%S gasoil for next year at a premium of 30-35cts/bbl to the quotations on FOB basis.

Fuel oil: Some weak factors cause market to go down

The differential for MR-size cargoes of 3.5% sulfur fuel oil(380cst) on an FOB Japan basis went down on week. Several weak factors pushed the market down going forward. Freight rates surged nowadays, and inventories still remained high in Singapore. Furthermore, sales in prompt loading were frequently heard. Last week, Nghi Son Refinery Petrochemical Ltd (NSRP) in Vietnam sold 42,000mt of 4.8% sulfur fuel oil loading in early December, and Bharat Petroleum Corp Ltd (BPCL) in India moved to sell 26,000mt of 3.8%S fuel oil loading on Dec 13-14.