Asia Distillates-Markets recover slightly despite thin spot activity

Asia’s middle distillates markets recovered from the previous session’s losses and started off the trading week slightly stronger against a backdrop of softer crude futures, though slow trading activity and weakness in ICE gasoil were prevalent.

Spot trading activity however remained thin in the open market, in line with the fewer number of spot sale tenders for May cargoes.

Talks of refinery run cuts starting May continued to cloud the market’s outlook, but supplies are still likely to outweigh regional demand in the near-term.

While weakness in the West did weigh on overall discussion levels, expectations of lower exports from China for May month-on-month cushioned the impact. Meanwhile, South Korean refiners have so far sold 8-9 spot 10ppm sulphur gasoil cagoes loading in May, slightly down compared with 16-17 cargoes for April.

Refining margins rebounded back to almost $15.50 a barrel as a result.

Cash differentials likewise gained by around 2 cents a barrel, given the flat price difference between May and June paper swaps, despite a wide buy-sell gap for May cargoes in the afternoon trading session.

Jet fuel refining margins however rebounded at a slightly slower pace against a backdrop of tepid demand, with regrade widening slightly to a discount of $1.65 a barrel.

South Korean refiners have so far sold up to nine jet fuel spot cargoes for May, steady from the same levels in April.

SINGAPORE CASH DEALS

– No deals for both fuels

NEWS

– Saudi Aramco 2223.SE is in discussions to acquire 10% stake plus one share of China’s Hengli Petrochemical, according to an agreed Memorandum of Understanding, the Chinese company said on Monday.

– Biofuels refiner Ecoceres is aiming to start up its Malaysia-based biofuels production unit in the second half of 2025, a company executive said on Monday.

– Kuwait’s Al Zour refinery has issued a spot tender offering 0.5% very low sulphur fuel oil (VLSFO) for loading in May, trade sources said on Monday.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)