Due to expectation of strong demand from Japan after the earthquake and high bids from Japanese companies, the premiums of two cargoes of fuel oil cutter stock surged in Asia this week, C1 learned from market sources.
Taiwan's Formosa Petrochemical Corporation (FPCC) sold Vitol 10,000mt of low-viscosity cutter stock on Tuesday at high FOB premiums of US$130/mt, for loading at the end of March, traders said.
The premiums were sharply up from about US$100/mt for another cargo of 3-15CST cutter stock, which was sold by FPCC in February, for loading in early March.
Thailand's Bangchak refinery awarded a tender to sell 20,000mt of VGO to Japan's Itochu on Wednesday, with FOB premiums high at US$190/mt. The other bids were much lower, ranging from US$120/mt to US$180/mt, according to a bidder.
The bidder expected this cargo to flow directly to Japan's power companies.
"The market is widely divergent about when demand from Japan will surge and how much fuel the country needs," he said, "But some trading companies, particularly Japanese ones, have put in much higher bids for gasoil in view of supply shortage in Japan."
