Japan has imported some gasoline from Singapore in a rare move to tide over domestic market tightness stemming from refinery turnarounds and outages, market sources said this week.
The last time Japan, typically balanced on gasoline, imported gasoline from Singapore was in June 2017, for a 40,007 kiloliter (251,540 barrels) clip, according to data from Japan’s Ministry of Economy, Trade and Industry.
A Medium Range clean petroleum tanker carrying up to 35,000 mt of gasoline loaded from Natural Fuels Terminal Jetty 1 in Singapore and due to arrive in Chiba on August 9, according to market sources and data from S&P Global Platts cFlow.
Phillips 66 fixed the Nave Pyxis for a Singapore-Japan voyage, loading a cargo of gasoline over July 29, at Worldscale 160 points basis 30,000 mt.
Sources said that since the tanker was expected to load up to 35,000 mt of cargo with 50% overage, the freight would equate to $13.88/mt using a flat rate of $9.34/mt for Singapore to Chiba.
Phillips 66 declined to comment on the fixture.
This is an unusual move as Japan typically meets its own gasoline demand with its domestic refineries, market sources said.
Refinery turnarounds and outages have tightened the gasoline market which bolstered domestic prices, and encouraged imports.
“The domestic premium [in Japan] is very high, so it makes sense to import,” a gasoline broker said.
Refiner Taiyo Oil is conducting a major turnaround at the 138,000 b/d Kikuma refinery in western Japan. Both crude distillation units were shut over June 8-9, and the maintenance is expected to last until end-August. Cosmo Oil’s 100,000 b/d Sakai refinery also remained shut and is due for an upgrade in 2019.
“[Any shortfall in Japanese gasoline] should be bought from the international market, as some refineries have low production rates or are shutting down so the domestic market cannot cover a total loss from one refinery,” a source with a Japanese refiner said.
Stocks of gasoline in Japan fell by 3.3% from the previous week to stand at 9.33 million barrels in the week ended July 28, data from the Petroleum Association of Japan showed. This was down 15% from a year ago.