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Weekly Summary

Products: Feb 22-26: Korea Gasoil softens on more supply while jet crack shrinks

GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB North Asia basis was unchanged. However, it was pointed out that exports of oil products including gasoline and gasoil from China loading in China were increasing, so that freight rates were also going up. On Tuesday, in China, China National Offshore Oil Co (CNOOC) made moves to sell 10,000-15,000mt of 92RON gasoline loading in March from South China. Meanwhile, no fresh purchases were seen from Asia including Indonesia, the largest buyer of gasoline in the region. For refineries, the residue fluid catalytic cracker at S-Oil' Onsan refinery in South Korea had been shut down for a glitch this week. It was not clear when the unit would be restarted. On the demand side, a buyer in Vietnam was looking for a gasoline cargo loading in March, but details were unknown. As reported, since Feb 11, Nghi Son refinery had been suspended for the power outage. A market source said that it was being restarted.

 

NAPHTHA

In the Northeast Asia spot markets, premiums for naphtha on a CFR Japan basis rebounded. As bullish factors, prices for gasoline and ethylene were soaring up due to pressure for supply on the impact of cold waves in the US. An end-user in Northeast Asia said that US gasoline futures were spiking to the similar level to demand season in summer, so it was supportive for prices for naphtha as the feedstock of gasoline in Asia. In addition, this rises in premium of naphtha the impact on the Middle East market conditions. A source related with the Middle East markets implied that term levels for loading from the Middle East would possibly be pushed up by rebounds in the CFR Japan premiums for naphtha.

MIDDLE DISTILLATES

MR-size cargoes of 0.001% sulfur gasoil on an FOB North Asia basis increased. As jet fuel refining margins were sluggish, refiners in the regions shifted to produce more gasoil. In addition, the differential on an FOB South Korea basis was pushed down on strong freight rates this year. On the other hand, The differential on an FOB Taiwan basis was pushed up due to some demand for vessels off the coast of Taiwan.

 

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In Japan, ENEOS was disrupted the supply of VLSFO from its Negishi refinery and Chiba refinery on the back of legal inspections and turnaround, so that prices for 0.5% sulfur fuel oil as the feedstock of VLSFO would likely be supported. In the meantime, heightening temperature reduced spot demand of liquefied natural gas (LPG) and fuel oil for power in the domestic markets, and CFR Japan prices for 0.3% sulfur fuel oil were gradually weighed. S-Oil in South Korea seemed to have shut down its residue fluid catalytic cracking (RFCC) unit due to failure with unknown schedule for the restart.

 

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Tokyo : Products Team  Satoko Waki   +81-3-3552-2411Copyright © RIM Intelligence Co. ALL RIGHTS RESERVED.