Asia light ends: Key market indicators this week


Singapore —
Asian could face some weakness during the May 17-21 week stemming from a new wave of COVID-19 infections and renewed localized lockdowns, while naphtha could weaken from a softening gasoline market. The Middle East LPG market is set to see healthy supply as Saudi Aramco is expected to keep its acceptances for June-loading term cargoes in line with lifters’ nominations, sources said.

Asian light ends rose mid-morning May 17 on the back of the strengthening crude oil complex. July ICE crude futures rose $1.97/b, or 2.94%, from the Asian close on May 14 to stand at $69.03/b at 0300 GMT May 17.


**The Singapore June 92 RON gasoline swap stood at around $73.76/b early May 17, up 2.8% from the Asian close on May 14, on the back of the firmer crude complex.

** in the Asian gasoline market are likely to weaken this week as a new wave of COVID-19 infections sweep across Southeast Asia, forcing restrictions and reducing overall gasoline demand. Singapore was reported to have tightened movement curbs, while and Malaysia re-imposed localized lockdowns, according to local media reports.

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**Market will focus on results of several term tender negotiations this week. First, offers for Taiwanese private refiner Formosa ’ H2 2021 term gasoline tender are expected to be submitted by May 17, with award details to follow soon after. The refiner’s decision to resume term comes as refining margins for gasoline has improved, but may likely threaten regional supply-side fundamentals should demand fail to improve in the near term.

**’s Pertamina is also expected to commence term negotiations this week, seeking a minimum 1.65 million barrels of 88 RON gasoline per month and 1.65 million barrels of 92 RON gasoline per month. The tender closes May 19.

**Pertamina is also expected to award a spot buy tender for 200,000 barrels of HOMC 92 RON gasoline for early to mid-June delivery. The spot tender closes on May 18, with validity until May 20.


**The physical C+F Japan naphtha stood at $602.50/mt mid-morning May 17, up $9.75/mt from the Asian close on May 14, due to an increase in crude markers.

**Market participants were looking forward to increased naphtha demand from new cracker start ups by LG Chem and GS Caltex over June, however, market demand was also curbed by the use of LPG as an alternative steam cracker feedstock, steam cracker turnaround season and weakness in gasoline, sources said.

**Swaps backwardation reached a three-week low, which reflected weaker sentiment — front-month June-July Mean of Platts Japan naphtha swap, which had fallen $1.25/mt week on week to $4/mt at the May 14 Asian close, Platts data showed. The backwardation was last lower on April 23, at $3.75/mt, Platts data showed.

**This week, the buying cycle has moved to the next half month, with buying activity slated to begin for H1 July delivery into North Asia.


**Front-month June CP propane swap notionally indicated May 17 at $502.5/mt, versus $501/mt on May 14. June CP swap indicated $2.50/mt above May term CP.

**June-July CP propane swap structure indicated at $2.50/mt backwardation from $1.50/mt contango on May 14, while July-August indicated a $2/mt contango versus $1.50/mt contango previous session.

**June propane CP swap indicated $7/mt above butane, versus $8/mt previous session.

**Saudi Aramco due to announce June term acceptances around mid-week, and is expected to keep in line with ADNOC’s acceptances that were in line with lifters’ nominations.

**These would keep Middle East supply healthy, as Kuwait and Qatar have also been offering via tenders June-loading cargoes, while US supply remains ample.

**Eyes are on Chinese demand amid PDH plant maintenance season, while demand is tepid.

**Discount of LPG to naphtha hovers between $50/mt and $60/mt, sustaining North Asian petrochemical makers’ interest in propane and butane as alternate feedstock.


Wendy Cheong

Ramthan Hussain

Wanda Wang

Mark Tan


Norazlina Jumaat


Natural Gas, 

Source: Platts


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