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Singapore's Hin Leong sells 2nd gasoline cargo this year
[SINGAPORE] Singapore trading company Hin Leong returned to the gasoline market after a 2-1/2-week absence and sold its second cargo of the fuel in the cash market this year, traders said on Thursday.
Traders expect the local company to beef up its business in the Singapore gasoline cash market and said it could be looking to hire someone to trade the motor fuel.
Hin Leong - which mainly trades fuel oil and middle distillates and owns the Universal Terminal storage and tanker fleet - was approved to participate in price reporting agency Platts' Market-On-Close price assessment process in 2013 to trade gasoline cargoes.
"Hin Leong is expecting to expand its gasoline trading," a source close to the matter said.
But traders said the trading company had not done any deals in the Singapore cash market until earlier this month.
Hin Leong first sold a 50,000-barrel gasoline cargo in the Singapore cash market for July 26-30 loading on July 6 to Unipec, trading arm of China's state-owned Sinopec.
It sold similar volumes on Thursday for Aug 7-11 loading to Vitol.
"I expect Hin Leong to become more active but they are likely testing out the market first by selling just one cargo at a time," said a Singapore-based trader.
A senior executive with the company did not want to elaborate on the trades.
More players would mean more liquidity in the market and this would benefit the market in general, traders said.
Gasoline has outperformed other oil products this year, with the Asian gasoline margin hitting multi-year highs in June at over US$19 a barrel before falling to US$14.41 a barrel on July 23.
The outright price for gasoline, which previously held mostly below that of gasoil, has surpassed the price for benchmark 500-parts-per-million gasoil for most of this year due to demand. Physical trades of Singapore's 92-octane grade gasoline transacted in the cash market from January to June 2015 were at 9.2 million barrels, a Platts' spokeswoman said.
This was about 64 per cent of the volumes traded in the whole of 2013 and about 56 per cent of the volumes done in 2014.