Singapore
Indonesia
Indonesian buyers
entering their low season of February-March are cutting down on their demand.
But one 1,000t shipment was made this week to Belawan port in Sumatra from Singapore at around $295-305/t fob, with freight costs said to be about $30-35/t.
Indonesian state-owned refiner Pertamina is believed to be close to securing 10,000t of the 20,000t it started making enquiries for last month. The buyer was said to have been offered $285-290/t cif for the 10,000t of 60/70 material. Due to the tight supply situation in southeast Asia for the rest of the first quarter, Pertamina might consider buying from the Middle East or South Korea. The refiner is also said to be seeking another 30,000-50,000t of asphalt for the first half of 2007 to fulfil domestic consumption.
The floods that have hit Jakarta are likely to increase the country’s demand in the next quarter, when dry weather returns and repair works begin in affected areas.
Singapore
Supply remains tight in Singapore with refiners expecting to maintain production volumes this year similar to last
year’s 150,000-200,000 t/month. According to market sources, ExxonMobil is
believed to be facing a supply crunch, putting more pressure on an already
tight market. Limited availability for February and March is expected to boost
prices towards $260/t and above for April, on the back of strong Chinese demand
as construction projects go into full swing then. The slowdown ahead of the
Chinese New Year holiday and availability of stockpile from low winter demand
is keeping demand from China soft at the moment, say producers.
Strong fuel oil prices are boosting asphalt prices, say a number of producers. The shortage of supplies is seeing truck prices to Malaysia increase this week, with prices in the range of $235-245/t according to market participants.
Prices in Singapore seem to have recovered from the decline in January from ExxonMobil’s series of highly competitive offers in the market, with market indication for prices at about $245-255/t fob — up from about $230-240/t fob previously. Strong demand from buyers in Indonesia and China at the start of this year has contributed to stronger fob price indications from producers in Singapore.
Malaysia
The shortage of
supplies in Singapore is seeing truck prices to Malaysia increase this week,
with prices in the range of $235-245/t according to market participants. Buyers
are expecting prices of asphalt heading into Malaysia to increase by about $5/t
fob to about $235-240/t due to higher demand during the country’s peak demand
months of January and February.
State-owned oil firm Petronas has about 6,000t of 80/100 spot cargo available this month and the offer price is said to be in the region of $230/t fob. According to sources, the producer is believed to have received an enquiry from Petron in the Philippines. But Petronas is still considering the deal due to the slow discharge rate at the buyer’s port of about five days. This week, Indian buyers have been actively making enquiries for March and April shipments from Malaysia.
Thailand
Peak
domestic demand for February and March continues to keep Thai suppliers out of
the spot market. But with wet weather expected to arrive in April and building
projects slowing down, a decline in domestic demand will probably make more
volumes available on the spot market.
Japan
Refiners
have little or no spot availability for February and March as domestic demand
is at its peak, especially with the warmer weather at the start of this year.
The limited supply is also attributed to refineries cutting their throughputs
this year, said one producer. But at the end of the current peak domestic
demand season, Japanese refineries are expected to have some spot availability
for April. High crude prices are also boosting producers’ price optimism, with
some expecting prices to strengthen steadily in the coming weeks.
South
Korea
Refineries
are sold out for February, with SK and S Oil only expecting to have spot
availability in March and April, respectively. An anticipated weakening of
domestic demand is likely to see SK have some spare spot capacity to offer in
April.
China
Domestic
prices have been largely unchanged this week, except for a few modulations.
With two to three refineries shut down for maintenance in February, production
volumes will be reduced slightly. But with demand expected to weaken as the
Chinese New Year approaches, the market is unlikely to face much pressure. Cfr
prices were slightly up at $275-295/t, on the back of rising higher fob prices
from Singapore and Taiwan.
In the second year of China’s 11th five-year plan, asphalt demand for road building will increase — with over 5,000km of highway construction estimated to take place. This is in addition to a number of postponed construction projects carried over from 2006. Based on the tender information available, east China is likely to be the busiest in terms of construction projects.
Demand was muted in east China this week. Daxie refinery in Zhejiang province kept prices unchanged at 2,700 Yuan/t ($348/t), with stock at medium levels. The trade was done at Yn2,700/t for asphalt from nearby Zhenhai refinery. Petrochina Xingneng refinery in Jiangsu province was heard to have shut down for maintenance. CNOOC Asphalt refinery in Shandong province, which mainly supplies on a term basis, has its price stable at Yn2,700/t.
In south China, limited rail transportation continues to restrict refineries to buyers within the province. The offers from refineries in the region were around Yn2,550-2,650/t, unchanged from last week. Demand was also weaker this week. According to market sources, two to three tankers carrying 3,000-4,000t each are arriving in Guangzhou around 15-16 February.
Two new tenders surfaced respectively in northern Inner Mongolia and Shanxi provinces this week, each needing around 14,000-17,000t. Another tender seeking 20,000t was issued in central Hubei province this week.
In northwest China, Petrochina Karamay refinery raised its price by Yn100/t to 2600 Yn/t for customers outside Xinjiang province. The price for customer within Xinjiang went up by Yn200/t to Yn3,050/t.
In southwest Sichuan province, Petrochina Sichuan is still undergoing maintenance works which are likely to extend to March. Price from its stock was raised by Yn80/t to Yn3,100/t this week, possibly due to low availability. Two more tenders emerged this week for road building, each seeking around 30,000-40,000t in Sichuan and Yunnan provinces.
In northeast China, refineries kept prices unchanged and continued to supply to term contracts. Petrochina Qinhuangdao in Hebei province will be closed for maintenance starting 10 February.
Taiwan
Fob prices were
slightly up to $245-255/t on stronger crude values and limited supply. CPC has
sold out this year’s first four months of spot supply. The producer is expected
to sell its May-October or December volumes based on term contracts after the
Chinese New Year in February. Another supplier, Formosa, cancelled the planned
export of at least 10,000t in March, due to a change in its refinery schedule.
India
There is no
change to India’s domestic asphalt prices after the increase of an average of
430 rupees/t ($9.77/t) earlier this month.
Indian asphalt demand is reflecting strong economic growth in the country. Demand for asphalt in January last year was 307,300t but has moved up to 372,000t in the same month this year.
Demand for February was healthy at around 350,000t, according to Indian Oil Corporation (IOC). The total imports for the month would have been higher than for January as the construction season picks up pace, but colder than expected weather in northern India has stopped activity.
There was little likelihood of imports, with domestic refiners able to supply demand at present and Iranian bitumen not priced attractively enough to move into the Indian market.
IOC commissioned a 100,000 t/yr crumb rubber modified bitumen (CRMB) plant at the Haldia refinery this week. There are already three other existing CRMB plants, at Panipat, Baroda and Kochi. CRMB is preferred to typical asphalt because it increases the life-cycle of the roads it is paved with. The CRMB is priced around 10-15pc higher than typical bitumen produced by India’s refineries. India’s government has mandated that at least 10pc of roads under the National Highway Authority must be paved with CRMB.
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