GASOLINE

The differential for MR-size cargoes of gasoline on the Northeast Asia basis gained on strong buying interests of traders amid increasing demand. In Southeast Asia, as lockdown for COVID-19 was being lifted, purchases were getting more active especially from Indonesia. Procurements were also going up from India due to some refineries' troubles.

Meanwhile, refiners in China and South Korea had yet to fix export schedules in December, and they were not making moves to sell cargoes to date. However, it was unlikely that exports from China would pick up, so that tight supply in the region seemed to continue for December loadings. In the country, as a sense of thin supply was strengthening, the government announced that it would release national inventories of gasoline.

NAPHTHA

In the Northeast Asia spot markets, Japanese end-users kept moving to buy spot and term cargoes. Mitsui Chemical seemed to have closed a buy tender for naphtha arriving in mid-December in Osaka with unknown results for now. Also, the company was expected to issue another buy tender for arriving in the second half of December in Chiba. With regard to spot prices for naphtha on a CFR Japan basis, a market participant in Northeast Asia reported that market sentiment was weakening toward the end of year. The Chinese government released the national reserves for gasoline and it was a bearish factor for naphtha prices as feedstock of gasoline. In addition, mainly traders in Europe and the US were starting closing their positions for this year.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis strengthened. In Southeast Asia, demand was recovering as lockdown for COVID-19 was gradually being lifted. In Vietnam, buyers started to purchase spot cargoes of 0.05% sulfur gasoil. As reported, demand for vessels off the coast of mainland China was also emerging. On the other hand, a sense of tight supply lingered in Asia with only few exports from China. On end-October, the Chinese government announced that it would release national storage of gasoil as supply at home was scarce.

FUEL OIL

The differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis was unchanged. In Japan, Shikoku Electric Power had purchased high sulfur fuel oil for October to November as reported earlier. However, the company seemed to have procured not for additional demand, but for scheduled plans. Further, Kyushu Electric Power was informed to be rather moving to sell liquefied petroleum gas (LNG). A market source in Northeast Asia reported that power could be transferred between power companies in Japan in addition to a fall in LNG Prices in Europe. Japanese power companies who had built up inventories of fuel oil were in a wait-and-see stance for buying more fuel oil.