Taiwan refiners return to spot market after long hiatus as gasoline complex strengthens

Singapore — Taiwanese refiners Formosa Petrochemical Corp and CPC Corp. have returned to the gasoline spot market after several months' hiatus, offering cargoes of blendstocks and motor fuel for November as the Asian gasoline complex strengthens.

Private refinery Formosa was heard Oct. 6 offering one 250,000-barrel cargo of 93 RON gasoline with 50 ppm sulfur and one cargo of up to 9,000 mt of 95 RON alkylate in its first spot tenders since July.

This came a day after state-owned refiner CPC was seen offering either 9,000 mt of 100 RON reformate or 9,000 mt of C9 gasoline for loading over Nov 15-30 from Kaohsiung.

CPC recently emerged from a six-month hiatus to sell 32,000 mt of 95 RON catalytic cracked spirit, or FCC gasoline, for loading over H1 November from Kaohsiung. Market sources said that cargo was sold at a premium of around 30-40 cents/b to the Mean of Platts Singapore 95 RON gasoline assessments, FOB.

According to the tender documents seen by Platts, both Formosa's cargoes will load from the company's 540,000 b/d refinery in November; the gasoline over Nov. 3-15 and the alkylate cargo over Nov. 7-11.

"I think it came as a surprise to some because Formosa's refinery is still not back up to normal, given that one of its RDS units is still offline following the fire," a Singapore-based source said.

A July 15 fire at Formosa's 540,000 b/d Mailiao refinery complex forced the immediate shutdown of a 80,000 b/d No. 2 residue desulfurization unit, and subsequently a gasoline-producing residual fluid catalytic cracker unit on Aug. 10, S&P Global Platts reported earlier.

The No. 2 RDS will only restart in April 2021 at the earliest, according to official sources, while the status of the RFCC could not be ascertained Oct. 6.

"Since the outage [in July], Formosa didn't really have any spare barrels to sell in spot market. There was also not much incentive [to export] given that the gasoline complex was poor. This has changed since gasoline cracks have risen considerably," the source added.

Fundamentals in the Asian gasoline complex started to improve in mid-September as regional demand continued to recover against a backdrop of tighter supply from North Asian refiners, who have kept output levels at reduced rates due to poor refining margins.

The FOB Singapore 92 RON gasoline crack against front-month ICE Brent crude futures has traced the tightening of of the regional supply-demand balance. The crack was assessed at $4.82/b at the close of Asian trade Oct. 6, well above the $3.65/b averaged over September, Platts data showed.

"But regional demand is still not at pre-pandemic levels, so I don't think that the Taiwanese refiners will raise rates too much to sell gasoline only," another source said.