GASOLINE

In Northeast Asia, refiners in Taiwan kept selling cargoes. Formosa Petrochemicals Co (FPCC) issued a sell tender for 250,000bbl of 93RON gasoline loading on Jul 27-31 on Wednesday and the tender was scheduled to close on Thursday. As reported, the company sold two 250,000bbl cargoes of 93RON gasoline loading on Jul 16-20 and Jul 21-25. On the demand side, a refiner in Japan was reportedly making moves to procure an MR-size cargo of gasoline loading in July due to its refinery trouble, but a deal had yet to be heard. Another refiner also seemed to have bought an MR-size cargo of 91RON gasoline loading at the end of June for a glitch at its refinery.

The differential for SR-size cargoes of 91RON gasoline on an FOB South Korea basis went up on active purchases from Japan. Due to several troubles at refineries in the country, some refiners were making moves to buy gasoline both in the domestic and the international market. One of them procured some volumes from trading houses at home, so that the trading houses were increasing procurements from South Korea.

NAPHTHA

In the Northeast Asian spot markets, Japanese end-users were confirmed to have procured for August delivery. Mitsui Chemical seemed to have bought paraffinic naphtha as paraffine content at 75% arriving on Aug 4-18 at a premium of around $10/mt to Japan quotations through a tender. The tender was nominated by eight companies. Further, Showa Denko seemed to have purchased paraffinic grade as paraffine content at 75% for early August delivery at a premium of $10.50-11.00/mt to the same quotations. A market source in Northeast Asia noted that the CFR Japan prices for naphtha arriving in August were conducting steady, while the prices for paraffinic naphtha as the feedstock of ethylene whose prices were low were slightly softening. As a bearish factor, LG Chem in South Korea started the operation of its new naphtha cracker and GS Caltex was also going to boot the new unit this week, so that supply of ethylene was increasing. However, steady prices for ethylene derivatives would likely support run rates for naphtha crackers and demand of naphtha.

MIDDLE DISTILLATES

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB South Korea weakened. A sense of oversupply was strengthening. Amid declining demand of light cycle oil (LCO) in China, refiners in South Korea were focusing on exports of 0.05% sulfur gasoil. One of the refiners in the country proved to have sold an MR-size cargo loading in July this week. Other two refiners in the country seemed to have some cargoes for sale loading in July. As reported, GS Caltex had sold a combined six MR-size cargoes loading in July to date.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. Meanwhile, a sing of selling appeared, but movement of reductions for fuel oil supply was progressing in Taiwan. CPC was considering to conduct a tender to sell each 20,000mt 0.5% sulfur fuel oil and slurry oil for July loading in end June. Instead, the company was planning only the tender for July loading in June. Supply and demand fundamentals were worsening compared to May, and the profitability was lowering. Recently, refining margin for gasoline was better than VLSFO and so on, so that CPC was going to pull up run rates for its residue fluid catalytic cracking unit (RFCC) rather than the crude distillation unit (CDU), and was tending to produce gasoline more than fuel oil.

Asia-products(Japanese) report sample

Products (English) report sample