GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB Northeast Asia basis went up with a rise in the differential of gasoline on an FOB Singapore basis. In addition, the US largest pipeline was said to have been resumed after the cyber-attack, it was still considered to be a bullish factor for the market. For 92RON gasoline cargoes loading from South Korea in June, no deals were reported to date, but a source in a South Korean refiner said that deals could take place at a discount of around $1.30/bbl to the quotations on an FOB basis.

NAPHTHA

A market source in Northeast Asia said that paraffinic naphtha prices on a CFR Japan basis were conducting at a premium of around $10/mt to Japan quotations. Formosa Petrochemicals Co (FPCC) in Taiwan and Showa Denko seemed to have procured paraffinic naphtha as paraffine content at 75% for second-half June delivery at a premium of around $10/mt and at a premium in the low $10's/mt to Japan quotations, respectively. As a bearish factor for recent prices on a CFR Northeast Asia basis, an oil company in Northeast Asia saw that runs for crude distillation units were going up in Asia because of improving gasoline and middle distillate markets in spite of low refinery runs in Japan due to turnaround and trouble. In the meantime, Mitsui Chemical and Maruzen Petrochemical were expected to issue tenders to buy naphtha for early July delivery in the coming days. Instead, cargoes arriving in July for sale were thin.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of jet fuel on an FOB South Korea basis softened. Amid discussions on cargoes loading in June ongoing, prices differed depending on laycan. As reported, GS Caltex in South Korea sold two MR-size cargoes loading in June through a tender. It was newly revealed that the price for a cargo loading on Jun 8-12 was at flat to Singapore quotations, while that for the remaining one loading on Jun 25-29 was at a premium of 30cts/bbl to the quotations on an FOB basis. A market source pointed out that cargoes loading in the first half of June were lower than those in May when supply was ample. In South Korea, over 20 MR-size cargoes seemed to be exported in May alone. It was also reported that some cargoes loading at the end of May remained unsold.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB China basis softened. On Friday, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation in China announced that consumption tax would be imposed on imported light cycle oil or LCO from Jun 12. Stable demand for LCO in China had supported the gasoil market. However, due to the decision by the Chinese government, demand for LCO could retreat and prices for 0.05% sulfur gasoil, of which specifications were close to those of LCO and those for 0.001% sulfur gasoil could weaken going forward.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In Japan, Sendai refinery of ENEOS was expected to resume in second-half May and the company was restarting the shipment of VLSFO, but there was a concern that the transfer of 0.5% sulfur fuel oil as the feedstock of VLSFO to the other refineries would be delayed. However, the imports to Japan were not heard so far. In the meantime, Idemitsu was exporting monthly 20,000-30,000mt low sulfur fuel oil to South Korea, and they seemed to have sold it to the country at the market values ahead of long holidays. Cosmo Oil seemed to be not issuing any tenders to sell. In Taiwan, Formosa Petrochemical Co (FPCC) was not planning to sell fuel oil loading in June, but they would likely conduct at least one tender in the near future. Further, CPC became the validity for a tender to sell 40,000mt low sulfur fuel oil loading in June on Wednesday. The result was not found for now.

Asia-products(Japanese) report sample

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