21 May, 2018
The differential for MR-size cargoes of 92RON gasoline loading from Northeast Asia went up on increasing demand in Indonesia. Indonesia’s state-owned Pertamina issued a buy tender for a combined volume of 730,000 barrels of 88RON gasoline for the first half of June. The company had earlier conducted a buy tender for five 200,000bbl cargoes of 92RON gasoline for the same period. A market source said that Pertamina planned to import 10.50 mil bbl in May and 11.00 mil bbl in June. The volumes were larger than those in usual months due to Islamic fasting month “Ramadan”.
In Northeast Asia, sources launched talks over July delivery. South Korean importers were said to be seeking cargoes for the first-half July delivery. There were views that the completion of major turnarounds on naphtha crackers in the region would drive up demand for petrochemical products. A source also believed that naphtha demand for gasoline blending would rise with the onset of a driving season. Consequently, more sources believed that tight supply/demand in naphtha would continue for July delivery.
The differential for MR-size cargoes of jet fuel loading from Northeast Asia went down. As the market was in backwardation, downward pressure on differentials for cargoes loading in the second half of June were strengthening. Meanwhile, cargoes from South Korea loading in the second half of June were being done. A refiner in the country reportedly sold an MR-size cargo of jet fuel loading in the second half of jet at flat to Singapore quotations on an FOB basis.
Spot cargoes of fuel oil for sale from South Korea were hardly seen due to low inventories. On the other hand, imports of fuel oil into the country were likely to increase. A refiner in South Korea reportedly procured feedstock for bunker fuel to be delivered in June as the company started the operation of a newly constructed residual upgrade complex. In Taiwan, CPC Co bought 40,000mt of 3.5% sulfur fuel oil (180cst) to be delivered in June for bunker fuel. The price was reportedly at a premium of around $15.00/mt to Singapore quotations on a CFR basis. The cargo seemed to have been traded at a higher than normal differential due to higher freight cost as the volume would be unloaded at two ports.