Asia Middle Distillates & Gasoline – Pricing Analyst Update (25 Sep–2 Oct)

• Singapore physical middle distillates prices swung sharply again this week, driven by uncertainty over China’s October export volumes and a string of regional refinery outages, while gasoline physical prices were supported by tight regional supply of mogas and blendstock.
• The Singapore 10ppm gasoil flat price fell $2.52/bbl w-o-w to $171.83/bbl on 2 Oct, while cash differentials slipped $0.13/bbl to $3.36/bbl. Jet fuel flat price jumped $11.75/bbl to $176.78/bbl and cash differentials climbed $3.01/bbl to $4.55/bbl. The regrade strengthened $9.83/bbl to $4.95/bbl. The 92 RON gasoline flat price rose $7.88/bbl to $148.31/bbl, with cash differentials up $1.18/bbl at $12.13/bbl.
• Early in the week, talk that China’s October exports would be only slightly below September levels weighed on middle distillates, as South Korean and Japanese refiners were already offering steady volumes, particularly of gasoil. Lacklustre Southeast Asian gasoil demand also capped prices. Gasoline drew support from expectations of lower Chinese October exports, and from refiners maximizing distillate output over that of gasoline to capture strong cracks.
• Cash differentials of jet fuel, diesel and gasoline surged on 30 Sep after some regional buyers were reportedly told that some of the October cargoes they had bought from China couldn’t be loaded. Confusion followed on 1 Oct, with no official word on whether Beijing had banned October clean product exports or whether the disruption stemmed from administrative delays. Those delays were later attributed to the late issuance of a third batch of export quotas and the start of China’s 1–7 Oct National Day holiday, leaving exporters little time to secure licenses for each cargo. Middle distillates eased on 2 Oct after Platts reported the third batch of export quotas had been issued in the late afternoon of 30 Sep, leading some traders to expect China’s October exports to resume after the Golden Week holiday.

Refinery outages heard this week:

• MRPL (India): a “major fire” broke out at the coker hydrotreater unit of its Mangaluru refinery; the unit was evacuated and the blaze brought under control (Bloomberg).
• HPCL (India): shut the diesel hydrodesulphurisation (DHDS) and diesel hydrotreating (DHT) units at its 190 kb/d Mumbai refinery, according to sources familiar with the matter (Argus).
• BPCL (India): took the vacuum gasoil hydrodesulphurisation (VGO-HDS) unit and a DHDS unit offline at its 310 kb/d Kochi refinery on 23 Sep for planned maintenance. The VGO-HDS is scheduled to restart on 11 Oct, while the DHDS is expected to stay down until 14 Oct (Argus, citing a company spokesperson).
• RAPID (Malaysia): crude distillation unit (CDU) heard to be down for 10 days (market sources).
• HD Hyundai Oilbank (South Korea): expected to bring the 88 kb/d residue fluid catalytic cracker (RFCC) at its 690 kb/d Daesan refinery back online on 2 Oct. The gasoline-making unit was shut earlier in the week as a precaution over a potential equipment issue, but an inspection found no abnormalities (Bloomberg).