Singapore, 16 June (Argus) —
Singapore
Prices are unchanged this week as most suppliers have already settled their June cargoes and are only likely to start negotiations for July volumes in the next fortnight. But one local producer is heard to have an additional 5,000t for June delivery. The significant increase in prices over recent weeks has meant that buyers are holding back on making July purchases for now.
While activity on the cargo market has slowed, truck deliveries to Malaysia have picked up again this week as Singapore ex-refinery prices have moved closer to cargo levels. In May, truck sales to Malaysia were limited because of the more lucrative cargo market for Singapore refiners.
Malaysia
Domestic prices this week have fallen after last week's big jump of around 150 ringgit/t. The drop in prices is a result of the influx of lower priced volumes of around 1,520-1,530 ringgit/t offered by an importer here. Volumes offered by the state-owned producer and some Singapore refineries are still around 1,550-1,580 ringgit/t say market participants.
Ex-refinery prices from Singapore made a downward correction this week by $10/t, after increasing by $40/t last week.
Thailand
Suppliers here continue to hold back on selling their remaining June cargoes, keeping prices unchanged this week at around $430/t fob. The high production costs faced by refiners and buyers' unwillingness to pay higher prices is likely to keep some June cargoes available till even late this month. A local producer is likely to be offering 1,000-2,000t of spot product for June delivery in the coming weeks.
The conclusion for July cargoes is expected to be late as refiners are holding back in the hope of achieving better prices. But with domestic prices at similarly unattractive levels of around $430-440/t fob some refiners are likely to continue with their export sales.
Indonesia
Buying activity looks to be picking up for July as some importers are already starting to receive offers this week. A local dealer was said to have received a July cfr offer estimated to be around $460/t fob from Singapore.
Vietnam
A local supplier is seeking around 7,000t in July and has already secured 3,000t from ExxonMobil in Singapore at around $440-450/t fob. The buyer is hoping to purchase the remaining volumes from refiners in either Singapore or Thailand. Import volumes are likely to drop in July, according to market participants, as not all building projects have the budget to match the recent price increases.
Japan
Prices are unchanged this week with no signs of offers for July cargoes at the moment.
Production in the country fell by 19.6pc in April to 378,430t, while consumption dropped 48.5pc to 199,802t at the start of the low season for road paving and construction activities. But exports in April increased by 23.3pc to 15,784t, with more volumes available for export sales.
South Korea
A series of refinery maintenance scheduled this month for the country's largest producer is affecting export availability in July. The supplier is unlikely to have any spot cargoes available but will continue to fulfill its term contract requirements. A mid-sized refiner is likely to offer around 20,000t for spot sales in July, but has not yet started making offers.
China
Market sentiment has weakened slightly this week, as rainy weather has arrived in east China while heavy storms continue to affect south China. These two regions are the country's key asphalt consumers. Prices from domestic refineries have been largely unchanged during the week, despite crude values now remaining over $136/bl.
The traded price for east China stayed at 4,450-4,550/t yuan and Yn4,300-4,450/t for south China for domestic grades. China's tightening of bank loans this year has also affected some importers and buyers that are now holding back on their demand. But the reduced production at refineries is still holding up prices. According to estimates by market sources, production so far this year is about 50pc less than last year. The weaker demand and reduced supply from domestic refineries have helped to balance each other out, resulting in relatively stable asphalt prices. These market conditions are likely to remain until the end of the rainy season.
Cfr prices for imported grades are up by $10/t this week. The higher prices have stifled some buying interest, as importers are now not as keen as they were last week. The delivered prices of imported grades are now slightly higher than domestic grades, according to market sources.
Taiwan
Supplier Formosa has awarded a tender of a 2,900-3,000t cargo on 10 June to a buyer likely to be from China on a cfr basis, loading in the first half of July. According to the refinery, it is possible to transfer the remaining two cargoes at 2,900-3,000t each, which had been planned for July export, to the domestic market if demand from within the island is strong enough with traded prices steady at 17,000 Taiwan dollars/t (US$560/t). Refiner CPC will have no export availability for July.
India
Demand is slow in the country as the monsoon season has started and is likely to continue until October. Refiners are continuing to produce some volumes and are focusing on drumming their product for now. A cargo of around 5,000t from Iran arrived at Haldia at the start of June, while an importer is looking to secure another cargo to be delivered to the west coast at the end of this month.
Domestic prices dropped by around 1,000 rupees/t ($23.37) at the start of the month when the government revised customs duty on cargoes, lowering it to 5pc from the earlier 10pc.
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