Gasoline: FPCC sells total 500kb for mid-Feb loading

The differential for MR-size cargos of 93RON gasoline on an FOB Taiwan basis and the differential for 92RON gasoline on an FOB Japan basis went down. Market sentiment was getting soft because supply volumes became larger. In the region, the operational rates of refineries remained high. Meanwhile, no serious troubles at refineries were heard. In addition, it was unlikely that freight rates for clean products might rebound.

Formosa Petrochemical Co (FPCC) in Taiwan conducted a sell tender for two 250,000 bbl cargoes of 92RON gasoline loading in mid-February on Wednesday. It was awarded at a premium of $1.00/bbl or higher to the quotations on an FOB basis. These two cargoes were scheduled to be co-loaded.

Chinese companies continued to sell January-loading cargoes in the spot market. China state-owned Sinochem sold an MR-size cargo of 92RON loading at WEPEC's refinery on Jan 21-23 at a discount of 50cts/bbl to the quotations on an FOB basis via a tender closed on Tuesday. In the market, export volumes of the fuel from China in January were expected to be around 500,000mt, the same level as those in the same month last year. In Japan, ENEOS moved on selling one cargo loading during the end of January to early February.

Naphtha: Market on CFR Japan inches up, demand for China expected to increase

The second-half February open-spec naphtha prices on a CFR Japan basis became bullish. It was considered as a bullish factor that Chinese companies might have stronger buying interest in the international market in the future. According to a market source, the Chinese government was reportedly considering imposing the tax on naphtha as a petrochemical feedstock that was sold in the domestic market. If this was materialized, buying interest would possibly go up.

China state-owned CNOOC bought 200,000mt of light naphtha for delivery in the second-half February. The awarded price was heard to be at a premium of $3.00-4.00/mt to the second-half January quotations on a CFR basis. It was also reported that a part of cargoes was traded at a premium of $1.00-2.00/mt. A market participant mentioned that import demand by CNOOC was usually 75,000-80,000mt per half month.

The differentials for LR-size cargoes of naphtha on an FOB Middle East basis went down because supply increased. The turnaround season finished in the region. In the spot talks, Qatar Energy (QE) sold 50,000mt of full range naphtha for Jan 28-29 loading at a premium of $17.00/mt to the quotations via a tender closed on Tuesday.

Middle distillates: ME gasoil market softens after T/A and weak EU demand

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis were unchanged. No fresh sales for cargoes loading in February were reported from Rongsheng Petrochemical in China or South Korean oil firms. Among Japanese refiners, Idemitsu Kosan and Cosmo Oil planned to continue importing a certain volume of February cargoes. Cosmo Oil intended to purchase at least one MR-size cargo for February loading.

The arbitrage window for cargoes from Northeast Asian to the US West Coast remained open. Because of this, some traders were reportedly moving to forward cargoes with high flash point loading in January from South Korea.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis went up. Due to backwardation in the Singapore paper swap market, the market for late January cargoes had declined. However, as talks were shifted to early February ones, the market went up. On Wednesday, a refiner in South Korea sold 300,000bbl loading in early February at a discount of 75cts/bbl to the quotations on an FOB basis.

The differential for LR-size cargoes of 0.001% sulfur gasoil on an FOB Middle East declined on week. State-owned Kuwait Petroleum Co (KPC) started sales of January loading cargoes from its 615,000b/d Al-Zour refinery. Operations of the 205,000b/d crude distillation unit and the 55,000b/d atmospheric residue desulfurization unit had almost resumed by Jan 3. Some other refineries in the Middle East had terminated their turnaround by early December, and supply from the region was on the rise. On the other hand, the European market lacked upward momentum, and inquiries to buy Middle Eastern cargoes were poor. In addition, exports from India hovered high. Therefore, fundamentals in the Middle East were slackening.

Fuel oil: Ample supply for LSFO continued

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was stable. Fresh sales were not seen in Northeast Asia and the spot market was quiet. Demand for bunker oil increased in South Korea. Petroleum companies did not move to sell cargoes aggressively. In Japan, a trouble of the fluid catalytic cracker (FCC) seemed to have occurred at the 153,000b/d Negishi refinery of ENEOS Corp. The firm planned to resume the operations this week.

On Tuesday, Formosa Petrochemical Corp (FPCC) in Taiwan sold 40,000mt of 1.5%S fuel oil (MCB) loading on Feb 5-7 via a tender. The price was reportedly at a discount in the range of $60.00-65.00/mt to the quotations on an FOB basis. Inventories of low sulfur fuel oil remained high, and a sense of ample supply continued in Singapore. This was because fuel oil cargoes from Europe were brought to Asia.