Taiwanese refiner FPCC sells March gasoil at steeper discount -sources

Taiwan-based refiner Formosa Petrochemical Corp (FPCC) 6505.TW has sold at least one March-loading gasoil cargo at a steeper discount than a month ago owing to elevated freight costs, sources close to the matter said on Monday.

The sale of the 10ppm sulphur gasoil cargo loading March 1-5 closed at discounts of slightly more than $1 a barrel late last Friday, the three sources said. That compares with a discount of 6-7 cents a barrel for a mid-February shipment sold in early January.

The identity of the buyer could not be confirmed, though the cargo is likely to be delivered to a regional buyer ahead of the maintenance season starting in March, one of the sources said.

The deeper discount from February is a reflection of the continuously high shipping costs, one of the three sources said, adding that it was still a “better deal” from the end-February discounts of $3-4 a barrel last week.

The cost of shipping about 750,000 barrels of gasoil from northeast to southeast Asia is about $1.65 million, latest pricing data from SSY Tankers showed.

These costs are up almost 80% in the past two weeks, the data showed.

Spot differentials for remaining March-loading spot cargoes are likely to hinge on freight rates again, one of the sources added.

FPCC typically does not officially comment on tender results.
Source: Reuters (Reporting by Trixie Yap, Editing by David Goodman)