Gasoline: Prices for non-oxy grades go up on expected strong demand outside Asia

The differential for MR-size cargos of 93RON gasoline on an FOB Taiwan basis and the differential of 91RON gasoline on an FOB South Korea basis went up. The market was pushed up as demand for cargoes outside Asia was expected to increase. The arbitrage window for cargoes from Asia to the US West Coast was open and buying interest for cargoes for Mexico was reported. State-owned Pemex seemed to be looking for cargoes loading in late March in Asia. In the US, one of the main sources of gasoline for Mexico, gasoline specifications were now shifting for the summer season, so that procurement costs were also rising to the country. In addition, as the sea level of the Panama Canal was going down, several vessels were stuck at the Canal and freight rates were pushed up. Therefore, it was getting favorable for Pemex to buy cargoes from Asia.

Naphtha: Sales volume for 2h Apr slightly over against demand

Open-spec naphtha prices on a CFR Japan basis were at a premium of $18.50-19.50/mt to Japan quotations to be assessed 30 days before deliver. In the spot markets, some sellers seemed to have surplus sales cargoes, so that several deals were heard to be awarded at lower prices than the current market level. One Japanese petrochemical company procured 25,000mt of open-spec for delivery in the second half April at a premium of mid-teen to the quotations on a CFR basis via a tender closed on Thursday. According to sources, a part of sellers offered at lower prices than the current market prices.

On Friday, talks on cargoes for delivery in the first half May were heard. Japan's one petrochemical company purchased 25,000mt of open-spec for delivery on May 1-10 at a premium below $10/mt to the quotations to be assessed 45 days on a CFR basis before delivery via a tender. A lot of sellers were heard to offer at the same level to the quotations. A market participant said that it was hard to prospect market sentiment for the first half May due to unclear supply/demand fundamentals.

Middle distillates: China export volume prospected to be over 1.00mil mt

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia strengthened. Sales volume from China and South Korea for April loading cargoes was expected to decrease compared to March. In addition, several oil companies in Japan were rather turning to buyers' position. Under these circumstances, supply/demand fundamentals in Northeast Asia appeared to be tightening temporarily. In South Korea, SK Energy sold 300,000bbl for Apr 8-10 loading through a tender. The price was at a discount of about 60cts/bbl to the quotations.

In China, Rongsheng Petrochemical sold an MR-size cargo loading on Apr 9-11. The price was at a discount of around 40cts/bbl to the quotations on an FOB basis. According to market sources, this cargo was bought at a slightly higher price due to its high flash and low sulfur spec. Several market sources reported that April-loading exports from China would be more than 1 mill mt, which was expected to be down from the 1.6 to 1.7 mill mt in March.

Selling interest from Japan was limited. Some companies were rather trying to buy cargoes on the back of regular maintenance. However, due to high port charge fees comparing to nearby countries such as South Korea, some sources pointed out that the deals could take place at a lower price than FOB South Korea.

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia increased reflecting tightening supply/demand fundamentals. In South Korea, sales of April-loading cargoes were limited as GS Caltex and SK Energy, the main sellers of 0.05% sulfur gasoil, were expected to curb supply due to turnaround of their refineries. Under these circumstances, buying inquiries from Vietnam and other countries were stable, so that supply/demand fundamentals were tightening.

Fuel oil: Japan's Idemitsu purchases FOB Kuwait 0.5%S FO loading in late-Mar

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was staying in the same level on week. None of South Korean oil firms engaged in discussions on cargoes loading in April. On the other hand, Japan's major oil refiner Idemitsu Kosan Co reportedly won a tender issued by Kuwait Petroleum Corporation (KPC) to sell a 130,000-barrel cargo of 0.5%S fuel loading on Mar 23 to 24. The differential for the cargo on an FOB Kuwait basis was believed to stand at a discount of $9,00/mt to the quotations. Idemitsu apparently planned to haul the cargo to Singapore, and then ship a part of the cargo to Japan, a market participant said. The company scrapped the Yamaguchi refinery in the Yamaguchi prefecture, western Japan, which is owned by Seibu Oil, a Idemitsu group company. Additionally, another affiliate firm Toa Oil Co recently halted the 70,000 barrels-per-day Mizue plant at the Keihin refinery near Tokyo for regular maintenance, As a consequence, the refiner saw decreasing supply of 0.5%S fuel in the current market.