The refiner is looking to buy at least five 35,000 metric tons of 500 ppm sulphur diesel cargoes within a three-month delivery window – one for August, and two each for September and October, the sources added.
The sources asked not to be identified as they are not authorised to speak with the media.
The tender will close on July 10, with validity up to July 14.
These planned purchases are likely to cover a shortfall in domestic diesel production, when Vietnam’s largest refinery Nghi Son goes on maintenance starting end-August, one of the sources said.
The refiner bought a spot lot for loading between July 10-20 early in this week at a premium of around $1 a barrel to Singapore quotes, Reuters records showed.
These purchases come in addition to an earlier short-term contract procured in mid-June for 500 ppm sulphur diesel cargoes delivering in July to December at around flat to a small premium on a price formula linked Singapore quotes.
Consistent buying from Vietnam will likely provide a price floor for spot cash premiums of higher sulphur diesel in the short run leading up to August, despite rising supplies expected from South Korean refineries after their maintenance season, one northeast Asian refinery source said.
Cash differentials for 500 ppm sulphur diesel have climbed to a premium in early July after trading at discounts for the past seven months, Refinitiv Eikon data showed, reflecting this slightly stronger demand-supply trend.
Source: Reuters
