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Singapore
Prices were
largely unchanged, with sellers saying they had nothing to offer for February. China remained the focus, particularly the southern and eastern parts of the country as
buyers made up for a period last year when construction activity was disrupted
by a spate of typhoons and bad weather.
On the fuel oil market, tight prompt supplies and rising crude futures sent high-sulphur fuel oil prices higher, although rising supplies from the second half of February kept a lid on spot premiums. Steady Chinese buying ahead of the lunar New Year holidays in mid-February remains the major pillar of support.
Malaysia
Weak demand
pushed prices down. Extensive flooding caused by heavy rains iin the southern
part of the country, where the main demand growth was expected this year,
dampened demand. Sellers were forced to cut prices by around $20 ringgit/t
($5.71/t) from last week as a result.
Industry sources watched progress on the construction of the Kemaman bitumen plant with interest. A 68,000t cargo of Boscan crude from Venezuela arrived earlier this week on the vessel Harmony forcing the completion of the unfinished crude pipeline to be rushed as a result. Much speculation was heard about the cost of the demurrage that must have been incurred as a result of the vessel waiting to offload the cargo, as well as how much testing would be done on the pipelines before the crude was pushed through.
Indonesia
Demand for
up to 20,000t of asphalt was heard for delivery over February and March. Buyers
hoped that weakening crude prices would see lower offers from Singapore and Taiwan suppliers but sellers were likely to offer the equivalent of a slight discount
to domestically sourced asphalt. Pertamina offered Cilacap at $308/t on a fob
basis, unchanged from the previous week. Higher interest was heard from Indonesia because of a maintenance shutdown at the Cilacap refinery in February to replace
tubing in the asphalt unit. The unit will run at half its 50,000 t/month
capacity during this period.
Thailand
Reasonable
volumes were still on offer from Thailand, from both TPI and TLB. One February
cargo was heard to be on offer for as low as $230/t on a fob basis, although
this could not be confirmed.
South
Korea
A South Korean
seller was offering February lifting cargoes, for which it was asking above
$275/t on a delivered basis into China. Freight is around $30/t currently.
Buyers were conservative because of declining crude prices, but were not
expected to be too aggressive about achieving lower prices. Buyers indicated
that their interest for cargoes was to build inventory, as construction was
heading into a quiet period ahead of the Lunar New Year which falls around 18
February this year. Another seller cited no spot availability until April. The
supplier was thought to be cultivating the Vietnam market, and was reported to
have sold cargoes there below market levels so as to try and gain a foothold
into that market.
China
The market
was little-changed from last week. The publicized bidding price of many
projects in east China about or over 2,800 Yn/t ($360.17/t) for imported grades
have lent good support to healthy demand, but the approaching Chinese New Year
will soften demand between now to end-February. Low exports from Taiwan and South Korea prompted importers to rely more on cargoes from Thailand and Singapore. CFR prices were slightly up to $270-290/t, on the basis of higher freight rates.
East China continued to be the main demand area in China. After the peak bidding period around end-December and early January, there was new road bidding in Anhui, Zhejiang and Jiangsu provinces. According to some traders, the volume needed for road building in 2007 was around 230,000t for Jiangsu province with delivery in March-October, and 400,000-500,000t for Anhui province with delivery date later — around June to November. Asphalt prices from refineries in the region were around 2,600-2,700 Yn/t.
In south China, the contractors were busy with completing the small projects ahead of Chinese New Year in mid-February. But demand for 2007 in south China will be less than east China, for there will not be many big projects in Guangdong province this year. Around 2-3 projects in 2007 in Guangdong have emerged, with total demand of 100,000-200,000t.
In northeast China, asphalt prices from domestic refineries were around 2500 Yn/t ($320/t), almost no change from last week. The volume from these refineries was mainly provided to term contracts, and without spot supply. Asphalt from Petrochina Qinhuangdao in Hebei province of around 1,000 t/d was heard to have all gone to its own stock, waiting for a price increase in the days ahead.
Asphalt prices from Karamay refinery in northwestern Xinjiang province were around 2,700-2,800 Yn/t for customers within the province, and only around 2,500 Yn/t for those outside the province. The price was kept lower for customers outside the province so as to attract buyers who have paid a transportation fee for carrying from Xinjiang by train or truck.
Taiwan
Fob prices
were unchanged at $235-245/t. But spot supply was limited as CPC has sold
cargoes for the first four months of this year under term contracts, and Formosa has sold out of January and February cargoes. The total export volume scheduled
from Formosa and CPC is around 370,000-430,000t in 2007, much lower than
exports of 600,000-700,000t last year.
Japan
Refiners
continued to mull the possibility of run cuts to cope with weaker than expected
product demand, particularly for kerosene. Poor export prices continued to
inhibit sales, with refiners preferring to send what they could into storage.
India
Healthy demand
continued to be heard as a strongly performing Indian economy saw construction
activity accelerate, particularly during this quarter. But demand was easily
met by domestic refiners, with imports stymied by the prices Iran was asking. Iran cut prices last week but delivered prices were still unworkable into
the Indian market.
