Japanese kerosene import demand in Mar wanes despite north cold spell
Singapore (Platts)--22Feb2013/648 am EST/1148 GMT
Japanese demand for kerosene imports in March has weakened, with the
country's stock levels high enough to meet domestic winter demand, even with
below-average temperature forecasts in its northern regions, sources said
Four out of 12 regions in Japan could possibly experience below-average
temperatures over February 23-March 22, according to the weekly month-long
weather forecast released Friday by the Japan Meteorological Agency.
A Singapore-based trader said: "I don't expect there will be additional
kerosene imports into Japan at the moment. Currently, the stock level is
pretty high. Another really cold wave will be needed for that to happen, and
that would need to continue like 2-3 weeks, perhaps."
Trade sources said there is currently no market talk of kerosene needing
to be imported into Japan and no recent trades have been heard.
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Kerosene premiums fell back sharply in early February from recent highs.
In early December, kerosene parcels of about 10,000 mt each were heard
traded at $4/barrel over the Mean of Platts Singapore jet/kerosene
assessments. By the end of December, trades were heard done up to as high as
$10/b to MOPS and towards the end of January, sporadic trades of kerosene
cargoes were heard traded at a premium of $11-13/b.
In February, one trade was heard done at $6/b to MOPS for loading at the
end of the month. But sources thereafter said there were no more buyers for
end-February or early March cargoes, with the winter season in Japan expected
to draw to a close in March.
Some sources even said kerosene premiums may have already flipped to a
discount instead of a premium.
According to JMA's weather forecast, the northern island of Hokkaido and
Tohoku Area, northeast of Tokyo will either see below-average or average
temperatures. The populous Kanto/Koshin region in the east, as well as
Hokuriku in the northwest, will have below-average temperatures, it added.
Tokai in central Japan as well as the Kinki region in the west are
expected to see average temperatures. The rest of the regions, however, will
see warmer temperatures.
The Singapore-based trader said: "Kerosene sells good when the West[ern
parts of the country] are cold, because northern regions are always cold
Data published by the Petroleum Association of Japan released February
20 showed that kerosene stocks for the week ended February 16 had dropped
0.4% on the week to 13.73 million barrels. That was almost 23% higher than a
year ago, Platts data showed.
Japanese refineries, meanwhile, have been raising their jet fuel output
at the expense of kerosene, in anticipation of the weather-driven fall in
Reflecting this, PAJ data showed that Japan's jet fuel production as of
February 16 was 1.15 million barrels, up 69% from the previous week. That was
down 7.7% year on year.
Japan's kerosene output over February 10-16 stood at 3.8 million
barrels, down 5.6% from a week ago and up 10.1% year-on-year.
Jet fuel stocks for the week ended February 16 stood at 4.70 million
barrels, down 5.7% week on week, PAJ said. The stocks during the same period
were 11.7% higher from a year ago.
--Pamela Sumayao, firstname.lastname@example.org
--Edited by James Leech, email@example.com