Home / Oil & Energy / General Energy News / Asia light ends: Key market indicators for May 23-27

Asia light ends: Key market indicators for May 23-27

Asia’s light ends markets were entering the May 23-27 trading week on a strong note, supported by firmer crude futures, with gasoline also boosted by supply disruptions and improving travel demand.

While naphtha was expected to seeing more activity for H1 July delivery this week as a only handful of end-users have purchased cargoes to date, steam crackers were operating at lower rates and cheaper LPG remains an alternative. LPG is largely supported by stronger crude futures in a persistently well-supplied market, with buyers holding back for bargains.

** Asia’s gasoline complex is expected to strengthen this week amid supply disruptions caused by unexpected refinery closures and expectations of healthier demand from the loosening of COVID-19 restrictions in the region, market sources said.

** Gasoline supplies are expected to tighten, as South Korean gasoline production is expected to be hampered by an explosion at S-Oil’s Ulsan refinery.

** China’s exports are expected to decrease moving into June as domestic demand strengthens on the recent relaxation of COVID-19 travel restrictions, with China reducing the number of pre-arrival tests for incoming travelers from select countries such as the US.

** Reflecting the stronger market sentiment, brokers pegged the front month FOB Singapore 92 RON gasoline crack against Brent swap at $27.60-$27.65/b at 0300 GMT May 23, down from $29.56/b at the Asian close May 20, but still above the May 4-20 average of $25.73/b in S&P Global Commodity Insights data.

** The physical C+F Japan naphtha marker was seen 75 cents/mt higher than the previous Asian close at $903.50/mt in mid-morning trade May 23, bucking the downtrend in European naphtha.

** Weaker sentiment was reflected in the derivatives market, with brokers pegging the front-month June-July Mean of Platts Japan naphtha swap time spread down $1/mt from the May 20 close at $7/mt in mid-morning trade.

** Asian naphtha was slated to see more activity for H1 July delivery into North Asia this week, as only a handful of end-users have purchased cargoes for the trading cycle.

** However lowered steam cracker operating rates and competition from LPG were weighing on Asian naphtha.

** Reflecting this, the cash differential for spot paraffinic naphtha was assessed at minus $2/mt at the Asian close May 20 and has been in negative territory since April 27 against benchmark Mean of Platts Japan naphtha physical on a CFR Japan basis, S&P Global data showed.

** The front-month June Saudi propane contract price swap was indicated at $772/mt in mid-morning Asian trade May 23, up $7.50/mt from

the previous session and $78/mt below May term contract prices.

** The CP June-July backwardation was pegged at $3/mt, versus $2.50/mt the previous session, while July-August was indicated at $2/mt in contango, from $1/mt in contango the previous session.

** The premium of June CP propane to butane held unchanged at parity mid-morning May 23.

** Qatar Petroleum was heard to have sold via tender one 44,000 mt evenly split cargo for June 20-24 loading to a Japanese trader, though price details were not yet known.

** While Saudi June term acceptances had no cancellations, volumes were below the previous month’s, as lifters had nominated less than 400,000 mt. But traders expected additional spot cargoes to emerge later, keeping the region well supplied.

**Persian Gulf-Japan VLGC rates continued to climb toward $80/mt, as the premium seen in the West narrowed to about $3/mt. Vessel supply in the East has been declining for end-May to early-June, with three Indian tenders in the May 23 week taking up remaining vessels and any balance ships ballasting West, shipping sources said.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping