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DJ ASIA FUEL OIL: Prices Up;Kochi Refineries Offers Apr HSFO
(Comtex Business Via Thomson Dialog NewsEdge)SINGAPORE, Mar 29, 2006 (Dow Jones Commodities News via Comtex) --Asia fuel oil prices rose Wednesday, in tandem with hefty overnight gains in crude futures.
But the gains in physical prices were smaller than swaps prices, mainly as BP continued to lower its bid in the cash market, suggesting pricing activities are running out of steam.
In the Singapore cash market, BP bought two 20,000-metric-ton 180 cst fuel oil cargoes for April 13-17 and April 24-28 loading from SPC and Vitol respectively at a premium of $4.00/ton over the Singapore mean, compared with a premium of $5.00/ton Tuesday.
The physical price of 180 cst fuel oil was assessed at $335.95/ton, up $2.60/ton from Tuesday.
Shell submitted a bid at a premium of $3.50/ton over the Singapore mean, but the bid went untested.
In the Singapore swaps market, April swaps for 180 cst fuel oil were quoted at $332.50-$332.75/ton, compared with $328.75-$329.00/ton Tuesday.
Crack spreads to Dubai widened slightly, with April now at minus $8.80 a barrel versus minus $8.54/bbl Tuesday.
Spot prices in South China's Huangpu market Wednesday hit fresh all-time highs of CNY3,490-CNY3,500/ton, in line with crude futures.
Chinese end users continued to shy away from the sky-high prices.
In tender news, India's Kochi Refineries issued a tender to sell 25,000 tons of 180 cst fuel oil with 3.5% sulfur content and 0.991 density for April 17-21 loading. The tender will close April 6, and will remain valid until April 7.
Kochi Refineries last sold two similar cargoes for January loading to Mitsui Of Asia and Vitol at a discount of $37/ton to the Singapore mean.
With a heavy inflow of fuel oil cargoes from the West due to arrive in the second half of April, this tender may not be very attractive, said a Singapore-based trader.
Elsewhere, South Korean utility Korea East-West Power Co., or Kewespo, awarded its buy tender for 72,000 tons of medium-sulfur fuel oil for April 22-26 delivery to Korean company Hanwha Corp. at a premium of $8.90/ton over the Singapore mean, on a cost-and-freight basis, said a trader.
The price was slightly below the $9.23/ton in Kewespo's last purchase from Vitol for early March delivery.
-By Sherry Su, Dow Jones Newswires; 65-64154065; sherry.su@dowjones.com
-Edited by George Bernard
(END) Dow Jones Newswires
03-29-06 0521ET
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