Singapore, 21 July (Argus) —
Singapore
Producers are still taking their time and holding back with no firm offers having been made for August cargoes yet. Most sellers are likely to only conclude their August cargoes in late July or later, because of their expectations that prices might increase further. A few offers for smaller August cargoes were heard to have been above $500/t fob, but no deals have been done yet.
This week bulk prices are up by $13/t to $480-490/t fob while drum prices are up by $10 to $585-595/t fob on the back of strong market sentiment. The domestic rack price has crossed the $500/t fob mark to reach $505-510/t this week.
Malaysia
Domestic prices are relatively stable this week because of poor demand in the country. Most contractors are not starting on new projects as the contracts for these plans were concluded based on asphalt prices from three to four months ago a market source says. At the start of April prices were around 400-500 ringgit/t ($123-154/t) below this week's levels.
The state-owned supplier is heard to have kept prices unchanged at 1,740 ringgit/t this week. But buying is still slow because of the availability of more competitively priced tank truck volumes offered by a Singapore producer. With local production unlikely to fully satisfy domestic requirement in August, the state-owned supplier is likely to be seeking imports. But no offers have been made yet and no decision has been made on the volume required, a source says.
Thailand
Refiners here continue to hold back on their offers for August cargoes as well and some were even heard to have told buyers that offers will only be made in the first week of August. These sellers are likely to be waiting for the Singapore August cargoes to be concluded before making offers in line with Singapore cargo fob prices. This week bulk prices are up by $13/t to $465-470/t fob and drum prices are up by $10/t to $560-565/t fob.
Indonesia
Demand is slow here despite July typically being the start of peak construction season. Several large projects have been put on hold while contractors renegotiate with the government for more funding as asphalt prices have increased significantly since the contracts were signed earlier this year. Most dealers here are relying on supplies from the state-owned supplier. But some initial negotiations for August cargoes from Singapore were heard to have started at $500/t fob and above market participants says.
Vietnam
Offers by refiners in southeast Asia have been slow to reach dealers here as well as most sellers are still hoping for prices to increase further. A local supplier was heard to be seeking 8,000-10,000t of product in August but so far has only received one offer from a Singapore refiner at $500/t fob. But that offer has since been retracted as the refiner is heard to be revising its offer.
South Korea
A major refiner and another mid-sized producer have no plans to offer any spot cargoes in August. Because of the poor margins producers are choosing to focus on production for their term and domestic volumes instead.
China
Market sentiment has weakened slightly in east and south China this week as crude values plunged lower to $130-131/bl. Offers from domestic refineries are largely unchanged, although prices have been unofficially slashed to generate buying interest. In east China, traded prices decreased by around 30-50/t yuan ($4.39-7.32) to Yn4,400-4,500/t for some refineries in efforts to boost demand. But refineries have kept their offers largely unchanged to maintain the impression of more bullish or stable market conditions. In south China, demand has been slightly better than east China, although it is still far from strong. The traded price in the south is around Yn4,400-4,500/t, similar to that of east China. But in northwest China, limited supply has bolstered Petrochina Karamay's price up by Yn200/t this week.
The government's macro-control, tightness in bank loans and stricter regulations on road-building during the Olympics has greatly influenced importers' sentiment and appetite. Cfr prices are unchanged this week, and importers have been more cautious to bid compared with a few weeks ago and are also less keen to buy as domestic demand is now weaker than expected. But with two key suppliers in South Korea unlikely to have spot cargoes for August delivery and reduced availability by neighboring countries, prices may receive some support.
Taiwan
The supplier Formosa has issued a tender this week to sell two cargoes each of 2,900-3,000t for August delivery to southeast Asian buyers, one on a fob basis and the other on a cfr basis.
India
Domestic prices increased on 16 July to 29,300 rupees/t ($687/t) for 60/70 bulk and 32,400 rupees/t for 60/70 packed bitumen. Demand is at a seasonal low because of the monsoon but is expected to return to normal in October. Most requirements in the country are being fulfilled by local refiners and importers' existing stockpile a market source says.
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