New York, 24 July ( Argus)
Singapore
There is no real change in Singapore. Production remains the same with plenty of product available. Sellers are complaining of a slow down in demand and the primary target of complaint is China’s lost appetite. There has been no drop in the price perhaps because of the crude price increase last week. It was reported that some Singapore refiners are still pushing excess supply into Malaysia at considerable discount. An Exxon cargo was reported sold for about $270/t. One trader, a shipowner, said they will put their ships into dock for maintenance in about two weeks to take advantage of the quiet market.
Continued weakness in fuel oil markets, due to abundant supplies, kept spot differentials at steep discounts to spot prices. Singapore fuel oil stocks jumped to their highest level in eighteen weeks, near to tank top levels, as the contango market encouraged traders to keep cargoes in storage. A cargo of 380cst HSFO loading on 20-22 August was sold by Indian refiner MRPL to a Mideast Gulf trader at a weaker discount than its previous tender because of the oversupplied market in Singapore. The cargo was awarded at mops -12/t to -13/t on an fob basis, compared with a similar cargo for loading in late July at about mops -9/t.
Malaysia
A new gantry will be installed and begin operating by August at the Petronas depot. There were unconfirmed rumours that this would increase the loading capacity to 1,500 t/d. Local demand remains very subdued so Petronas are targeting the export market although shipping remains a problem. Petronas say buyers are offering as low as $250/t ex-Melaka but deals are only likely to be done at around $265/t. The buying interest is for the most part Chinese but no deals were said to have been concluded.
A domestic end-user again complained that the market was very quiet because of a lack of construction projects and that the government has still not announced the details of new projects. The end-user is looking forward to when the Kemaman plant comes on line as the truck route from Kemaman to Kuala Lumpur has less opportunity for trucks to make stops to blend the bitumen with low quality products and siphon off some of the bitumen, a common practice in Malaysia. However, the Kemaman plant was thought by the end-user to be mainly interested in targeting the export market.
Thailand
Thai Petrochemical claimed to have concluded a deal last week to deliver 4,000t to south China in August for $295/t on an fob basis. Last week, Thai prices were assessed at around $275-285/t on an fob basis but Thai Petrochemical said they have pushed their price up to $290/t. The exact reasons for this increase were unclear and it was not confirmed whether others in Thailand were doing the same.
South Korea
Bad weather is attacking Korea at home and abroad. Very heavy rain has affected Korea as well as China, its principal market for bitumen, preventing buyers from receiving cargoes. But with little spot availability, sellers in Korea are not overly concerned in the short-term.
China
Large inventories, which were built up during unusually heavy buying over the winter, and the rain continue to subdue the market in the east and south. But market participants and observers believe that the situation will improve and the market will pick up soon enough, once construction projects get moving which will deplete the inventory levels. Import prices are under pressure with quotes being heard in east China at around $360/t on a cfr basis.
In the meantime, sporadic price cuts continue to creep in at domestic refineries following some tentative movement down last week. A market player who deals in east China said the domestic price there is now 3,500 yuan/t. Huaxing, an independent Shandong refinery, reduced the price by 100 yuan/t to 3,500 yuan/t, although last week a similar refinery in the area went down to 3,400 yuan/t. In Guangdong, Petrochina’s Gaofu refinery continued to offer at 3,900 yuan/t but real deals were completed in a range of 3,500-3,650 yuan/t, a small drop from last week. In the north prices are unaffected. Jinzhou in Liaoning province held prices at 4,150 yuan/t.
India
The monsoon is in full swing but still the price of bitumen goes up. On average the latest price increase, on July 15, was about $7/t. The price increases are a result of the rising crude price and the government’s policy of fixing major oil product prices such as gasoline. To recoup losses the national oil companies keep the prices of unregulated products, like bitumen and paraffin, high. At the time of writing no exact price for Mumbai could be ascertained.
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