Gasoline: More inquiries for Australia expected on fire at refinery

　The differentials for MR-size cargoes of non-oxy grade inched up. Uncertainty surrounding refinery operations in Northeast Asia meant that supply concerns remained. After the Middle East situation deteriorated, oil companies were procuring crude oil from outside the Middle East, but they reportedly had yet to be able to make up for the shortfall from the Middle East.

　CPC Co in Taiwan purchased an MR-size cargo each of 95RON gasoline and alkylate and both were scheduled to be co-loaded in one vessel for arrival during Apr 25-May 15 in a tender closed on Apr 8. The price for 95RON gasoline was reportedly at a premium of $7.00-8.00/bbl to the quotations and at a premium of around $17.00/bbl for alkylate to 92RON quotations.

　Inquiries for Australia was expected to strengthen. A fire occurred at the country's Geelong refinery on Apr 15 evening. According to market sources, the alkylation unit was shut down, and operations of the Residue Fluid Catalytic Cracker (RFCC) were reportedly affected.

Naphtha: Korea to promote feedstock procurement support project

　The first-half June open-spec naphtha prices on a CFR Japan basis unchanged. The naphtha market remained firm. According to one petrochemical company, while it was not impossible to procure cargoes in the spot market, available cargoes for sale were scarce, and the premium was unlikely to narrow significantly.

　The South Korean government on Apr 15 held a meeting to check the supply/demand situation of crude oil and naphtha. It announced that it would promote a support project, which aimed to diversify naphtha procurement sources. The support targets included naphtha, LPG, and condensate, which are petrochemical feedstocks, as well as basic chemicals such as ethylene and propylene.

　In response to this support project, reactions from South Korean petrochemical manufacturers were mixed. While one petrochemical company said, "We would prioritize naphtha procurement over ethylene and propylene," it was also heard that inquiries for ethylene and propylene were increasing.

Middle distillates: 500ppm GO market dives amid falling inquiries from Vietnam

　The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. The backwardation structure was quite sharp in the Singapore paper swaps market, and supply/demand fundamentals were slackening. Formosa Petrochemical Corp (FPCC) in Taiwan sold one MR-size cargo loading on Apr 21-25 through a tender. This cargo was concluded for Australia on an FOB basis at a premium of around $5/bbl to the quotations for H2 April.

　The differentials for MR-size cargoes of 0.001% sulfur gasoil and 0.05% sulfur gasoil on an FOB Northeast Asia basis weakened. About high sulfur gasoil, inquiries for Vietnam, a major buyer of the grade, were extremely thin. According to market sources, demand for land transport and fishing boats was rapidly retreating as domestic fuel supply prices in Vietnam rose. In addition, in Vietnam, procurement of crude oil from outside the Middle East for delivery from May onward was progressing, in addition to retaining domestically produced crude oil. Consequently, Dung Quat refinery, managed by Binh Son Refining and Petrochemical (BSR) under PetroVietnam, with a capacity of approximately 150,000 b/d, set its operational rate at 123% for the time being. Nghi Son Refinery and Petrochemical (NSRP)'s refinery, with a capacity of 200,000 b/d, which had been the subject of market speculation about a potential reduction in operational rates, was also currently operating at around 70%, and reportedly planned to maintain this level. Under these circumstances, buying interest for gasoil in the international market decreased.

Fuel oil: Buying interests from Japan appear

　The differential for SR-size cargoes of 0.3% sulfur fuel oil on an CFR Japan basis unchanged. However, supply tightened and the market was firm. Recently, inquiries for SR-size cargoes from Japan for power generation and other purposes were increasing. In Japan, refiners prioritized supply to affiliated companies and reduced sales to trading houses. Consequently, trading houses had considered importing cargoes due to a shortage of supply for power companies and industrial users. However, refiners in South Korea had no room to sell cargoes loading in May and few deals were heard. As previously reported, refiners in the country increased refining of US light crude oil, leading to a decrease in production of heavy distillates. Rather, they were also considering purchasing low sulfur fuel oil as feedstocks for secondary units.