Gasoline: CPC buys spot cargo amid fire-damaged RFCC shutdown at Talin refinery

The differentials for MR-size cargoes on an FOB Northeast Asia basis were unchanged on week. CPC Co in Taiwan conducted a buy tender for 250,000-300,000bbl of 92RON or 95RON gasoline for delivery during Apr 25-May 15 on Wednesday. The price validity date was set on Thursday. The 350,000bbl-per-day Talin refinery was shutting down the 80,000 b/d residue fluid catalytic cracker (RFCC) due to a fire occurred late last week. It would have an impact on production of the fuel.

No fresh sale for May loading was seen. demand by end-users was concerned to be getting weaker with a rise in prices for the fuel caused by higher crude oil prices. Oil firms in South Korea and China considered that the gasoline market would be weighed by fewer consumption. Policies that targeted to reduce consumption with restrictions of movement were already believed to be a bearish factor. Meanwhile, two Japanese oil companies reportedly had possibly available cargo for export in May.

Naphtha: Demand possibly shifting to LPG

The second-half May open-spec naphtha prices on a CFR Japan basis went down. Supply from the Middle East was temporarily expected to recover. Reductions of naphtha crackers continued and demand became weak. Meanwhile, prices for LPG were lower than those for naphtha and production margins of aromatics were getting narrower. Considering them, demand for naphtha was pointed out to be shifting to LPG as petrochemical feedstocks. In the spot market, Mitsui Chemicals reportedly procured 25,000mt of open-spec for delivery into Chiba in the first-half June at a premium of $120/mt to the second-half April quotations on a CFR basis.

The second-half May heavy grade naphtha prices on a CFR Japan basis were weighed. According to a market participant, a part of Japanese oil firms prioritized buying full range naphtha. In South Korea, at least one company decreased the operational rates of one reformer to minimum rates.

Middle distillates: Buying interest for early May cargo from Korea pushes up market

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis were firm. Buying interest for cargoes loading in the first half of May pushed up the market. According to a South Korean oil company, several traders were showing buying interest for one MR-size cargo loading on May 9-11. Bids were heard at a premium of at least around $20.00/bbl to the quotations on an FOB basis.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis became bearish. The market was pushed down as supply concerns were expected to retreat. Selling ideas from South Korean and Japanese oil companies for early May loading were heard at a premium in the low $20s/bbl to the quotations on an FOB basis. Expectations that supply anxiety for crude oil and petroleum products would recede emerged as the US and Iran reached an agreement for two-weeks ceasefire. Backwardation in the Singapore paper swaps market had also been narrowing compared to a while ago.

Fuel oil: Supply concerns recede

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis declined. Supply concerns receded and a sense of tight supply eased. Recently demand for bunker oil declined in China and Singapore and the bunker market softened. Independent refineries in China strengthened buying interests of crude oil and a sense of high prices of fuel oil cargoes were growing. For this reason, Chinese players were inactive to procure cargoes for refining feedstocks or bunker oil.