Chinese New Year (CNY) is 12 days earlier than last year on Jan 29. China will export 17% less year-on-year for January of refined products (3.3 million MT) due to earlier preparations for CNY. Although this drop in exports is large, it does include a surprisingly much larger proportion of jet fuel exports (66%). This export adjustment by China, in combination with the large spot purchases by Indonesia's PERTAMINA to the tune of 1.7 million barrels, may indicate a larger refinery maintenance window, but that is more speculation. Heat crack spreads on screen are still upwards of $25/barrel for distillates, but the 3:2:1 crack (including gasoline) is $10/barrel lower. Demand for diesel remains good, but not so great for jet fuel for some reason. Gasoil is still trading above its 50-day moving average and supporting Soyoil for the moment prior to CNY. Meanwhile, biodiesel gross margins in ARAG in the spot market are still mildly supportive, with FAME at +413 over ICE gasoil, while RME is now trading at +499 while BOGO still at +192. Crops in South America are experiencing typical summer heat, with Argentina having just finished plantings. We are still expected to see higher soy production, greater than last year by a massive 15-20 million metric tons at > 230 million MT.
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