Singapore — The Asia light ends market opened mixed in midmorning trade April 12, with gasoline seeing small gains while naphtha and LPG eased off slightly.
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Asian gasoline is seeing some support from Pertamina's spot tender but weak demand is expected in India following new movement restrictions in a bid to contain rising COVID-19 cases.
Asia naphtha was weighed down by a weaker European naphtha market, and softer demand ahead of the spring steam cracker turnaround season in north Asia.
LPG is seeing healthy supply from the Middle East, with market participants expecting Abu Dhabi National Oil Co to meet lifters' requirements in its acceptance of May cargo nominations due end-week, sources said.
ICE June Brent crude futures rose 29 cents/b to stand at $63/b at 0300 GMT April 12.
** The May FOB Singapore 92 RON gasoline swap rose in early April 12 trading, opening 1.2% higher from the previous session at $69.59/b, as the US RBOB-Brent crack strengthened 2.23% day on day at 0215 GMT April 12 from the previous day's seven-session low at $19.34/b.
** Nevertheless, headwinds await the Asian gasoline market as India, a large consumer of the motor fuel, continues to see rising COVID-19 infections. As of April 10, India reported 152,879 new cases of the virus, a new record for the country, according to Johns Hopkins University data. The high number has already spurred new movement restrictions in the state of Maharashtra, curtailing gasoline demand as driving activity slows to a six-month low of around 20% above baseline levels, Apple mobility data showed.
** Eyes in the week started April 11 will also be on the award of Indonesian state-owned Pertamina's HOMC 92 RON gasoline tender, with the tender set to close April 12 and offers to remain valid until April 14. The tender comes even as Pertamina's Balongan refinery returned to normal operations on April 7, S&P Global Platts reported earlier.
** Pertamina has sought a minimum 1.2 million barrels of HOMC 92 RON gasoline for six separate loading laycans over May and June, higher than the 400,000 barrels it had sought for in March. The decision to seek additional barrels of HOMC 92 RON gasoline cargoes on the spot market could be an indicator that although back online, the refinery has yet to raise output to prefire levels, according to market sources.
** The physical CFR Japan naphtha benchmark stood at $557.50/mt in early trading April 12, down 25 cents/mt from the Asian close April 9, on the back of weakness in the European naphtha segment.
** A stable sentiment was signaled for Asian naphtha, as the front-month May-June Mean of Platts Japan naphtha swap spread was at $3.75/mt in midmorning trade April 12, according to brokers' indications. This was unchanged from the Asian close April 9, however, the front-month swap spread was last narrower on Dec. 29, 2020, at $3.50/mt, Platts data showed.
** Upcoming spring turnaround season for naphtha-fed steam crackers in north Asia has weighed on trading sentiment for feedstock naphtha, sources said.
** The key spread between CFR Northeast Asia ethylene and CFR Japan naphtha physical was assessed at $512.25/mt April 9, widening $3.25/mt day on day as naphtha prices weakened, Platts data showed.
** The front-month May CP propane swap was notionally indicated April 12 at $497/mt compared with $498/mt April 9.
** Brokers indicated the May-June CP propane swap backwardation at $14/mt April 12 versus $10/mt the previous session.
** ADNOC's acceptance of May LPG cargo nominations are due by end-week, with expectations these will largely meet lifters' nominations. This comes at a time of ample spot Middle Eastern supply in Asia, putting pressure on CPs.
** Indian Oil Corp., or IOC, has emerged with a spot tender seeking evenly-split LPG for the first time this year. IOC is possibly limiting purchases to one to two spot cargoes, and the market will watch if the company would take FOB Middle East or Western CFR cargoes.
** The premium of propane to butane indicated April 12 was at $18/mt from $17/mt the previous session, reflecting persistent strength of propane demand especially from Chinese propane dehydrogenation plants, while demand for butane or split cargoes has yet to match Middle East supply.