Gasoline: Demand for Mexico and USWC emerges

The differentials for MR-size cargos of gasoline on an FOB Northeast Asia basis went up on week. In talks on oxy gasoline, five or six cargoes were traded for Mexico on an FOB Singapore basis. On the supply side, one of two residue fluid catalytic crackers (RFCC) still shut down and supply reportedly decreased from the refinery.

In the spot market, China state-owned Sinochem sold one MR-size cargo of 92RON gasoline loading on Mar 19-21 at a discount of 80cts/bbl to the quotations on an FOB basis via a tender closed on Thursday. This cargo was scheduled to be exported from WEPEC's refinery in Dalian.

In talks of non-oxy gasoline, around four cargoes were heard to be awarded for the US West Coas. On the other hand, several oil firms such as S-Oil and Formosa Petrochemical Corp (FPCC) planned turnaround from March.

Naphtha: Qatar Energy strikes supply term contract during Apr-Jun

The first-half April open-spec naphtha prices on a CFR Japan basis were unchanged due to both bearish and bullish factors. Demand did not increase so much because the operational rates of naphtha crackers did not rise. On the other hand, the gasoline market tended to rebound and the naphtha market would likely be affected by it, it was heard. In this situation, market participants paid attention to directions of the gasoline market and the LPG market. In talks on LPG, supply was expected to decrease from Saudi Arabia and market sentiment was softening. If this trend would continue, it would become hard to procure LPG as petrochemical feedstocks, it was heard.

In spot talks, Lotte Chemical in South Korea bought 25,000mt of open-spec for delivery in the first-half April into Daesan and Yeosu in the first-half April at a premium of $12/mt and $11/mt to the first-half March quotations on a CFR basis.

Qatar Energy struck supply term contracts with end-users and traders during April and June at a premium of around $29/mt for full range and at a premium of around $26/mt for light to the quotations on an FOB basis.

Middle distillates: Sales by Chinese companies to be full-fledge soon

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down as supply/demand fundamentals were expected to be slacking as full-fledged sales by Chinese players would start. In China, exports from the country in March were expected to reach 2.30-2.40 mil mt, while those in February were likely to be 2.00-2.20 mil mt. Sales from other refiners were expected to increase going forward.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis became bearish. Exports from China in March might increase, which could reach 1.00 mil mt. As domestic demand was sluggish and crack margins in the international market stayed firm, sellers could increase exports going forward.

Fuel oil: Sales from Japan in Mar continue

The differential for MR-size cargoes of 3.5% sulfur fuel oil(380cst) on an FOB Japan basis was unchanged. But weak factors were prevailing, and they pushed down the market. In Singapore, inflow of cargoes increased from outside regions including the Middle East. According to market sources, slightly lower than 3.00 mil mt of fuel oil cargoes arrived in February. It wiped out a sense of tight supply. As reported before, freight rates remained surged.

In the spot market, exports of high sulfur fuel oil from Japan increased on the back of troubles in refineries. Idemitsu Kosan sold an MR-size cargo of 3.5%S fuel oil (180cst) arriving in mid-March. Cosmo Oil also was considering selling a cargo of 3.5%S fuel oil loading in March. But the firm had not started a sale of it at present. As reported before, the refiner had sold 70,000mt of 3.5%S fuel oil(380cst) loading on Mar 2-4 at two ports via a tender closed on Tuesday. Trouble of a coker unit had not been resolved and operation rates remained low at the 100,000b/d Sakai refinery.