Gasoline: Indonesia to reduce imports in March on high inventories

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis was unchanged on week. However, bearish factors weighed on the market. Freight rates stayed high and were unlikely to go down soon. Further, demand in Southeast Asia including Indonesia was expected to decline and gasoline prices in Singapore were falling sharply. In Indonesia, state-owned Pertamina had increased imports of gasoline in January and February as the company would have turnaround of its refineries. However, as demand at home was not increasing as it had been expected, inventories of the fuel seemed to be building up. Thus, imports by the country were expected to decline in March. However, Pertamina was planning to import around 11.00mil barrels of gasoline in April as it had shut down the 260,000b/d Balikpapan refinery in February for maintenance activities which would last till May for upgrade works

Naphtha: Naphtha demand expected to recover from LPG

Open-spec naphtha prices on a CFR Japan basis were at a premium of $15.00-16.00/mt to Japan quotations to be assessed 30 days before deliver. The market price was steady. Considering the production ratio of petrochemical products, demand for naphtha was expected to recover from LPG. It was more profitable to feed naphtha than LPG because aromatics markets were firmer than olefins markets. One European trader mentioned that it would buy naphtha to optimize the balance of products when naphtha prices were higher than LPG. In the meantime, the average operation rates of propane dehydrogenation units were reportedly at around 66% in China.

Middle distillates: GO oversupplied from ME and India

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went up. Chinese sellers finally finished selling March-loading cargoes for the purpose to inventories. The Singapore futures market was in backwardation, and buyers showed buying interest in the first half of April-loading in order to avoid risks of a fall in prices. Under the circumstances, some market players who held cargoes loading in mid-March from South Korea also suggested that deals could take place at a discount of less than $1.00/bbl to the quotations on an FOB basis.

In gasoil markets, talks on cargoes for April loading started. The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB South Korea basis was capped at a discount below $1.00/bbl due to the oversupply. One MR-size cargo loading in Onsan, South Korea on Apr 1-5. In Singapore, inventories were sharply increasing as cargoes were exported from Middle East and India. Inquiries for Northeast Asia comparatively became weak. In addition, hovering high freight rates for MR-size cargoes also weighed on prices on the FOB basis.

Fuel oil: Power-generation LSFO prices decline for CFR Japan

The differential for MR-size cargoes of 0.3% sulfur fuel oil on a CFR Japan basis shrank from Mar 1 amid sluggish demand. Despite no fresh talks seen for spot cargoes in the market, Japan's power utilities significantly became apathetic to securing low sulfur fuel oil (LSFO). Under the circumstances, "Negotiable levels on a CFR Japan basis currently stood at a lower single-digit premium to the Singapore quotations," said a market source. In Taiwan on Mar 6, CPC Corp closed a tender to buy a MR-size cargo of 0.3%S for delivery in April, and offers must be valid Mar 8. CPC would decide the purchase volume based on the final prices.

On the other market front, state-owned Kuwait Petroleum Corporation (KPC) apparently did not even start selling 0.5%S cargoes for loading in March. Meanwhile, KPC was actively supplying LSFO since January, enhancing the mood of oversupply in the Asia market.