SINGAPORE: Asia’s naphtha crack and gasoline margin each rose to a two-day high of $24.20 a tonne and $3.81 a barrel respectively on Wednesday, tracking grains in crude oil.

Asia’s top naphtha importer Formosa Petrochemical Corp emerged with tenders to buy open-specification naphtha for Aug. 11-20 arrival at Mailiao as well as liquefied petroleum gas (LPG) for first-half August as raw material for its crackers.

The tenders will be awarded later this week.

Industry sources were however not optimistic that the permanent shutdown of the largest refinery in the US East Coast would have any immediate major impact on Asia.

Philadelphia Energy Solutions (PES) is expected to seek to permanently shut its oil refinery in the city after a massive fire caused substantial damage to the complex.

Shutting the refinery would create a squeeze in gasoline supplies in the busiest, most densely populated corridor of the United States.

“Chances are that it could open up the (arbitrage trade route) between US Gulf Coast / Europe and PADD 1,” said Matthew Chew, principal oil analyst at IHS Markit.

But Chew added that the impact on Asia will be marginal as inventories in Asia are still on the high side and the shutdown of PES is unlikely to cause a substantial upswing in the gasoline market.

This sentiment was shared by some traders in Asia, who added that if there is a shortage in the United States, Europe would be the key supplier based on distance.

Indian Oil Corp (IOC) sold a cargo for July 15-17 loading from Chennai on late Tuesday, possibly to a European trader, industry sources said.

This however could not be independently confirmed as buyers and sellers typically do not comment on their deals.

IOC had previously sold a cargo for July 6-8 loading from Chennai to Vitol at a premium between $14 and $15 a tonne to its own price formula on a free-on-board (FOB) basis.

South Korea’s S-Oil said it had signed a memorandum of understanding (MoU) with its top shareholder, Saudi Aramco, for technical advice on a multi-billion dollar petrochemical plant it is looking to build.

The South Korean refiner was looking to build a steam cracker with a capacity of 1.5 million tonnes per annum and olefin downstream facilities in the plant, which it hoped to complete in 2024 as part of a drive to expand its petrochemical business.—Reuters