New York
Singapore
Singapore prices held steady with one market player complaining that although demand was picking up he was restrained by the shipping factor and lack of supply. Prices for bulk cargoes on an fob basis are still around $280/t while the truck price to Malaysia was hovering just above $250/t.
High-sulphur fuel oil prices fell lower on the back of weaker crude futures. A massive sell-off in paper swaps dragged prices down further, as losses outpaced the fall in crude futures. Singapore residual stocks fell by more than 1.1mn bl for the week to 13.8mn bl, but supplies continue to overwhelm weak regional demand.
Malaysia
A major buyer said that Petronas was offering 1020 ringgit/t this week, while ExxonMobil and Shell offered 1045 ringgit/t and 1035 ringgit/t respectively. The Kemaman Bitumen company has invited future customers to visit its new bitumen plant, which is currently under construction, in September. The domestic market took a knock this week as media reports said that government building contractors were owed 2.4bn ringgit dating back six months to a year.
Thailand
Prices in Thailand remained in the high $270/t range just below Singapore levels. Sellers are waiting for Chinese consumption to increase next month which they expect will drive up prices. The domestic market is still subdued in Thailand as the rains hit the north part of the country. This is pushing sellers to look to the export market. But it is hoped that after two weeks the worst of the rains are over. Production is down and so there is not much spot availability.
Indonesia
Singapore sellers are still profiting by selling to Indonesia at above $280-285/t which is higher than to China because there is a strong demand and Pertamina is offering at $350/t. Singapore cargoes are heading to the east coast of Sumatra and west Java. A source in Indonesia said Singapore cargoes to east Sumatra are at about $320-330/t cfr. Freight from Singapore to Medan in Sumatra was said to be about $20/t.
Vietnam
Not much product is going to Vietnam with one Singapore seller saying he has not sold there for two months. ExxonMobil does still supply there and they were heard offering near $270/t for September deliveries.
Japan
A trader heard an offer of $300/t fob to a buyer in China. But the deal was snuffed out by the lack of storage space available in China. The price is almost irrelevant as no deals will be done while there is nowhere to store products.
South Korea
SK has 10,000t available on the spot market for September. Buyers in China heard of offers from SK for about $330-340/t on a cfr basis. SK is hoping that a clearer picture of the China market will emerge during September. They are worried about demand for the second half of this year which has seen an unexpected slump. Buyers in China have told SK that September will see demand pick up but the Korean exporter claims that some kind of a contingency plan might have to be implemented if this does not happen. SK has experienced some delays to deliveries recently as a result of China’s high level of storage.
S-Oil claimed its prices for September were higher than SK. S-Oil has experienced the same slower than expected buying from China as SK. There were complaints that Zhejiang and Jiangsu provinces in China were short of capital because of the tightening of government budgets.
Official figures released this month show that, despite the current cool market in China, fundamentals remain solid. South Korean production was up by 23.1pc in July year on year from 264,000t to 325,000t. In the first seven months of the year production was up by 16.3pc to 1.9mn t compared with 1.65mn t last year. Stocks shot up this month by 54pc over June to 120,000 t. At this time last year stocks were 55,000t which means a jump of 116.8pc. But exports were up by 35pc over July last year at 175,000t compared to 129,000t. Between January and July exports increased by 25pc to 1mn t from 800,000t last year. Official figures showed prices for exports had nearly doubled since July last year from $160/t to $295/t.
Taiwan
Weak demand from China is still the main concern in Taiwan. CPC said everything was running smoothly but were short on details this week. They hinted at having some spot availability and felt that Simosa should be selling for about $350/t on a cfr basis to China. The domestic market offers no relief to sellers as there are no significant government building plans in the pipeline. Simosa have a contract to supply 20,000t between September and February, although no clarification of the destination was forthcoming. Current prices for Simosa cargoes to Shanghai were put at $330-340/t cfr.
China
There has been less rain and in some parts severe drought has struck projects which are gradually starting up. Places like Sichuan which have been very hot and dry recently do not make a big impact on the bitumen market. Low offers of $330-340/t cfr continued to be heard. The domestic market continues to be well supplied but demand is weak. This week, prices were affected by the fundamentals. Sinopec refineries cut prices by 200yuan/t ($25/t). Sinopec tends to operate a system whereby all its refineries act in unison. This left Luoyang refinery in Henan selling AH 90 at Yn3,200/t. CNOOC refineries were more mixed. Binzhou refinery was selling at Yn3,600/t which is a fall of Yn50/t. Taizhou in Jiangsu is down to Yn3,520/t. Daxie in Zhejiang still held prices at Yn3,750/t with real deals concluded for Yn50/t less. At Zhenhai refinery in Zhejiang, prices were down to Yn3,500/t with actual deals done for Yn3,400/t. Independent Jinzhou refinery in Liaoning continued to post the same price of Yn4,150/t but real deals could be done at Yn3,900/t rather than Yn4,000/t last week.
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