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In Brazil, refined product output has been reduced on decreased demand, especially for gasoline and jet fuel, as per Anelise Lara, Petrobras' director for refining and natural gas.

Petrobras is currently running refineries at about 74% of installed capacity compared with an average of 79% in 2019, Lara said.

The sharp fall in consumption has caused an accumulation of surplus product prime for exportation.

Americas shipping sources heard an inquiry for a naphtha cargo from Brazil to the Far East, an unusual tradeflow from the Latin American country, which is typically short naphtha.

Petrobras was heard looking for a Long Range 1 tanker to carry a naphtha cargo from Brazil to the Far East for April 1-5 loading dates.

ASIA A DUMPING GROUND?

"People again looking at Asia as the dumping ground," a regional market source said.

With conditions in Asia improving, relative to the rest of the world, market players globally were heard to be looking to sending their naphtha barrels there.

"Everyone is sending naphtha to Asia," a market source in Asia said.

Platts assessed naphtha C+F Japan cargoes at $191.75/mt, its lowest level in over 20 years. It was last assessed lower on July 9, 1999, when it registered $191/mt.

"Crackers increased runs due to lower flat price, that's why we sustained and all the naphtha is coming here," the source said.

TRADE FLOW

Brazil typically imports naphtha from the US Gulf Coast to be used as gasoline in the local market.

Brazil's finished gasoline specification calls for 27% ethanol in finished gasoline, making the pre-ethanol blendstock lower in octane - similar to naphtha.

S&P Global Platts assessed Brazil gasoline blendstock at the port of Suape at $18.35/b Monday. The Suape gasoline price averaged $17.94/b over the past 10 trading days, a 55% drop compared to the previous 10-day average of $40.18/b.

Shipping sources reported four other ships on subjects this week to load clean petroleum products in Brazil, including the Cartagena, Ardmore Sealeader, Ardmore Sealancer and Elandra Redwood, for Petrobras. The Cartagena is scheduled to load April 4 and discharge in the USGC.

The Ardmore Sealeader is set to lift a cargo of ULSD April 6-8 with discharge options on the US Atlantic Coast and Europe, while the Elandra Redwood is scheduled to lift a cargo of unleaded gasoline on April 6 with discharge options in the USAC and Europe.

The Ardmore Sealancer, the most recently booked according to shipping sources, will load a cargo of unleaded gasoline on April 11 and has discharge options on the USAC and in Europe.

Petrobras was heard with another ULSD cargo Friday, intended to load April 11-14 with discharge options on the USAC and elsewhere.

Platts assessed ULSD at the Brazilian port of Suape at $41.77/b Monday. The Suape ULSD price averaged $43.36/b over the past 10 days, a 21.8% decrease compared with an average of $55.47/b in the previous 10-day period.