16 July, 2018
Talks on gasoline cargoes loading in August were gaining momentum in Northeast Asia. Formosa Petrochemicals Co (FPCC) in Taiwan reportedly sold an MR-size cargo of 93RON gasoline loading during Aug 27-31 through a tender at a premium of around 10cts/bbl to Singapore quotations on an FOB basis. A refiner in China also reportedly sold an MR-size cargo of 93RON gasoline loading in early August from Dalian at a premium of slightly lower than 20cts/bbl to the same quotations on an FOB basis.
Views emerged that malfunctions at some naphtha crackers in Japan would cap naphtha demand, which would drag market prices down in the coming days. Japan’s Keiyo Ethylene reduced run rates of its naphtha cracker to around 70% due to the outage at its facilities although it restated operations following the completion of maintenance.
Talks on gasoil cargoes loading in August were coming close to an end in Northeast Asia. A market source said that spot sales of cargoes loading in August by South Korea refiners were seen as almost over. In the meantime, a refiner in China was making moves to sell an MR-size cargo of 0.005% sulfur gasoil loading during Aug 11-12. It was also reported that the seller had earlier sold an MR-size cargo loading during Aug 6-7 at a discount of 80cts/bbl to the same quotations on an FOB basis. A cargo loading in August from Thailand was rumored to be sold in the market, but details were unknown.
Supply/demand fundamentals for low sulfur fuel oil were tightening due to increasing demand in Northeast Asia. Korea East West Power Co issued a buy tender for 30,000mt of 0.3% sulfur fuel oil to be delivered in Ulsan on Jul 27-30. The tender was scheduled to close on Jul 16. In the country, as the environment restriction had been tightened, power companies were likely to shift the use of low-sulfur fuel oil instead of high sulfur fuel oil. Meanwhile, end-users in Japan were said to be making moves to buy low-sulfur fuel oil. Although details were unknown, it was possible that some demand was emerging for power generation.