Gasoline: 92RON markets decline on slack fundamentals

The differentials for MR-size cargos of 92RON gasoline on an FOB South Korea basis and on an FOB China basis went down on week. Many refiners in Northeast Asia were moving to sell cargoes loading in March last week. In China, Sinochem reportedly sold an MR-size cargo of oxy-trade 92RON gasoline loading in mid-March from Quanzhou refinery at a discount of $1.40/bbl to the quotations on an FOB basis. Other refiners like South Korean SK Energy and Taiwanese CPC Co sold cargoes. Further, cargoes from the Middle East and India were flowing into Aisa to avoid the risk to send cargoes to Europe. Supply in Asia was quite ample. Meanwhile, amid high freight rates and weak demand in Southeast Asia, exports of cargoes to regions outside Asia were still hard.

Naphtha: Prices were on the decline and spreads against Brent shrink

Open-spec naphtha prices on a CFR Japan basis were at a premium of $14.50-15.50/mt to Japan quotations to be assessed 30 days before delivery and at a premium of $9.00-10.00/mt to Japan quotations to be assessed 45 days before delivery. Japan's one petrochemical company bought 25,000mt of open-spec for delivery in the first half April at a premium of around $8.00/mt to the quotations on a CFR basis via a tender.

Market sentiment for open-spec naphtha market was recently soft. The risks for vessels to sail off the Red Sea had smaller impacts on the prices because the Cape of Good Hope route was established for them. Demand of naphtha as a petrochemical raw material had yet to fully recover. In addition, declining gasoline market weighed on the naphtha prices. The price spreads against Brent temporarily shrank to $50's in favor of naphtha.

However, a part of petrochemical companies believed that the prices would not likely be declining because supply/demand fundamentals were tightening in Europe and the U.S. In case the arbitrage volume would decrease, the prices would rebound in Northeast Asia, it was pointed out.

Middle distillates: Singapore government requires all flights to use SAF from 2026

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis softened on week. Buying interest was restrained at present as most buyers had completed their short-coverings for cargoes in Australia and the U.S. Under the circumstances, in South Korea, SK Energy sold one MR-size cargo of Mar 14-16 loading through a tender. The price was at a discount of about 50cts/bbl to the quotations on an FOB basis. In addition, one South Korean refiner had already sold one MR-size cargo for March loading to the U.S. West Coast. S-Oil was planning to sell about one MR-size cargo for March loading. Many oil companies were focusing on refining and selling gasoil from a point of view of profitability, and could not afford to sell any cargoes in the spot market.

The Singapore government would require all departing flights from the country to use sustainable aviation fuel (SAF) in 2026 onward. The country was aiming for a 1% SAF adoption by 2026, and was planning to increase the ratio to 3 to 5% by 2030, depending on the global trends. To attain this goal, the government will introduce a SAF levy on airline companies and passengers. The rate of tax will be decided based on expectations of SAF prices and amounts of usage.

According to the calculations by the Ministry of Transportation in Singapore, the air-ticket price of direct flights for an economy seat from Singapore to Bangkok, Tokyo, London could be raised by around $1.

The differential for LR-size cargoes of 0.001% sulfur gasoil on an FOB Middle East basis stayed in the same level on week. It was reported that discussions on cargoes loading from the Middle East or India seemed to be held at a premium of around $3.00/bbl to the quotations on an FOB basis. However, market sentiment was strong on firm demand in Europe. As mentioned before, more and more vessels with cargoes from the Middle East, India, North Asia and so on to Europe were taking routes via the Cape of Good Hope, so that arrivals in Europe were delayed. Thus, prices of gasoil in Europe were increasing and a market source said that prices for cargoes from the Middle East and India were pushed up.

Fuel oil: Bullish and bearish factors behind the Asia market

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis was remaining in the level equivalent to Feb 16. No new talks were still detected on an FOB South Korea spot cargo basis. A market player took it that the market was seeking directions since the Asia market, where Singapore is the largest trading hub, weaved with the bullish factors with the bearish ones. In the area, less supply from Russia recently dampened market sentiment of ample supply to a certain degree, an industry source pointed out. On the other hand, buyers' poor appetite for 380cst persisted in the bunker fuel market.