GASOLINE

The differential for MR-size cargoes of gasoline on an FOB Northeast Asia basis gained on tight supply on the back of declining exports from China. As reported, refiners in China were curbing their exports as their export quotas were running short. On the other hand, spot purchases were recovering from Southeast Asia including Indonesia. On Oct 7, Formosa Petrochemicals Co (FPCC) in Taiwan sold two 250,000bbl cargoes of 93RON gasoline loading on Nov 18-22 and Nov 23-27 at a premium of $1.20/bbl to the quotations on an FOB basis. The deal seemed to have taken place at a slightly higher price as the buyer was possibly going to receive the volumes with a larger vessel.

NAPHTHA

In the Northeast Asia spot market, markets in China, South Korea, and Taiwan were closed for holidays. Therefore, buying interests for second-half November delivery were poor. In the meantime, Mitsui Chemical seemed to have bought paraffinic naphtha with a paraffine content at 75% arriving in Chiba at a premium in the high $6's/mt to a slightly higher than $7/mt to Japan quotations last week. In addition, YNCC in South Korea seemed to have procured paraffinic naphtha with a paraffine content at 75% at a premium of $5.75/mt to the same quotations. Further, SK Energy was informed to have been seeking naphtha with a paraffine content at 83% for November arrival. A source in Northeast Asia noted that the differential for paraffinic naphtha on a CFR Japan basis was slightly down. As a bearish factor, the source viewed that petrochemical demand was expected to be weakening owing to reductions of productions of automobiles. Ethylene prices in the region were more and more under downward pressures by worsening demand along with a concern that economy in China would recede due to power crunch in the country. China, so that premiums for paraffinic naphtha as feedstock of ethylene were shrinking.

MIDDLE DISTILLATES

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis was unchanged. Talks on cargoes loading in November started, but no fresh bids and offers were seen as market players still stayed in a wait-and-see stance. In Japan, some refiners were considering spot sales for cargoes loading in early November. Amid strong buying interests for cargoes for Australia, the company seemed to be targeting to sell cargoes at a slight premium to the quotations on an FOB basis. On the other hand, one of Japanese trading houses who considered procurements of cargoes loading in early November from Japan and South Korea speculated that deals could take place at a discount of 10-20cts/bbl to the quotations. In the market, discounts for cargoes in Northeast Asia could deepen if sellers in China would make moves to sell cargoes after week-long holidays. On the other hand, it was likely that prices could go up if refiners in China would focus on supply to the domestic market. Actual discussions were hardly seen as the market going forward was unclear

FUEL OIL

The differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis weakened on reaction against the recent strength in the market. Last week, East-West Power (EWP) in South Korea was said to have purchased 50,000mt and 20,000mt 0.3% sulfur fuel oil arriving in early October and mid-November at a premium of $105.00-110.00/mt to Singapore quotations (180cst) on a CFR basis through tenders. A market player saw that the differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis was at a premium in the range of $85.00-95.00/mt to Singapore quotations, judging from the deal levels. In Taiwan, CPC Co issued a buy tender for 0.3% sulfur fuel oil for November arrival on Tuesday.