GASOLINE

The differential for MR-size cargoes of gasoline on an FOB Northeast Asia basis strengthened on tight supply/demand fundamentals. Spot purchases from India or Indonesia were active as the COVID-19 cases were declining and lockdown for the virus was being lifted. On the other hand, few exports from China led a sense of thin supply in Asia. It was reported that an LR-size cargo of 92RON gasoline loading in November from South China was traded at a premium of over $2.00/bbl to Singapore quotations on an FOB basis. It was pointed out that the differential was equivalent to a premium of around $1.20/bbl to the quotations on an FOB basis for MR-size cargoes. Another refiner in China also reportedly sold an MR-size cargo of 93RON gasoline loading in early November from Dalian at a premium of over $2.00/bbl to the quotations on an FOB basis.

NAPHTHA

In Northeast Asia spot markets, end-users in Japan and South Korea kept procuring second-half November delivery. This week, Asahi Kasei Mitsubishi Chemical Ethylene Corporation (AMEC) and LG Chem were reported to have purchased paraffinic naphtha with a paraffine content at 75% at premium of $12/mt and $11/mt to Japan quotations respectively. In the region, although propylene prices started falling back, ethylene crack margins against naphtha stayed at a little lower than $400/mt, so that demand of naphtha whose paraffine content was high as feedstock for ethylene was steady. Owing to this, the differential for paraffinic naphtha on a CFR Japan basis was slightly up.

MIDDLE DISTILLATES

The FOB Northeast Asia market for MR-size cargoes of 0.05% sulfur gasoil strengthened. Amid increasing demand, traders were getting more active to buy cargoes. As the fish ban along the coast of mainland China had been over, demand for fisher boats was emerging. Demand in Southeast Asia was also going up as lockdown for COVID-19 was being lifted across the area. Some purchases were seen from Vietnam. On Oct 15, GS Caltex sold three MR-size cargoes loading on Nov 21-25, Nov 23-27 and 25-29 through a tender at a discount of $1.30-1.35/bbl to the quotations on an FOB basis.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis gained on an increase in demand of low sulfur fuel oil for power generations from South Korean power companies. Korea East-West Power (EWP) was informed to have purchased 0.3% sulfur fuel oil arriving in October at a premium of $119.00/mt on a CFR South Korea basis to Singapore quotations (180cst). A South Korean oil company saw that the differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis was up to a premium in the range of $95.00-105.00/mt to Singapore quotations. In addition, Korea District Heating Corporation (KDHC) was conducting a buy tender for two cargoes of 30,000mt 0.3% sulfur fuel oil for November and December delivery. The price validity date was set on Oct 19.