Singapore
Supply is greater than demand, maintaining a
downward pressure on prices. As shipping remains tight ,sellers are unable to
shift products by sea and so are looking to Malaysia to soak up their excess
supply. Offers have been heard as low as $265/t fob for bulk bitumen, but in
reality it is probably only trucks taking products to Malaysia that can go that low. At the start of the week Caltex and SPC cut prices,
prompting Esso to follow them later on.
It was believed that the Shell lubes plant shut down on Sunday causing a shortage. Talk of Shell seeking cargoes from Thailand supported the notion that there was some kind of problem.
Supply constraints continued to lift gasoil prices. But waning demand caused a fall in gasoline prices, and refineries returning from maintenance are set to boost supply. Excess supplies are already putting downward pressure on fuel oil prices. Tight supplies of high-sulphur grades sharply boosted gasoil prices. But the return of northeast Asian refineries from maintenance is lifting supply of lower sulphur grades and is also expected to lift supplies of high-sulphur grades over the next month. Active buying in Singapore failed to stem losses in high-sulphur fuel oil prices and spot discounts to benchmark Singapore prices continued to widen. Demand outside of Singapore’s bunker blending market remains weak, and ample exports from Indian refiners are being sold at ever wider discounts. Singapore stocks have jumped to a three-month high amid rising imports
Malaysia
Malaysian buyers are
benefiting from Singapore’s excess supply while refiners there target the
market exploiting the ease of logistics relative to elsewhere — as the shipping
market remains so tight. But demand is far from rampant, as the regional rains
have also had an effect on construction here. Petronas responded this week to
the increased supply and dropped truck prices by about 40 ringgit. An end user
in Malaysia said that she was offered 1120 ringgit/t by a Singaporean dealer
while Petronas offered at 1115 ringgit/t.
Vietnam
There has been no significant change in the price since May. The retail price
is at above $400/t in the north while the south enjoys its $10/ discount. The rainy
season is well under way in the south, literally dampening the market, but
demand is also unusually low in north and central areas even though it is still
hot and dry. The unusually low demand could not easily be explained other than
by a lack of projects gaining financing
Taiwan
Simosa continues to price itself out of the market making offers of $340-350/t
fob. CPC continues to offer at a considerable discount. A CPC cargo went to China this week, while Simosa still had no availability.
Japan
The domestic market is still flat, with low demand and growing inventories.
Japanese sellers are still trying for high export prices such as $320 fob.
Another offer was heard of $390 cfr east China.
Cosmo is discussing a 3,000t cargo with a Chinese buyer for July delivery and is asking for $320/t fob. Japan, like South Korea feels it can remain aloof from the price struggles around Singapore with its independent markets in north and east China.
South Korea
The South Korean market is unaffected by the drama further south. Their market
is east China, where demand is normal. There was no change in price for export
cargoes. A Chinese buyer told a Japanese trader that there was an offer of
around $285-300/t from a refiner in South Korea, but that they declined the
offer.
China
The falling Singapore price and bad weather is affecting the price in south China. Bitumen delivered into south China could be had for $340-350/t cfr. But the storage
tanks are full due to the heavy rains. One buyer said he had to split a cargo
in two. Although prices might be softening and might even go down further, in
the long term there is still huge demand for bitumen in China and the price will remain high.
An consumer in Yunnan province turned his nose up at Indian drummed bitumen in favour of cheaper Iranian products. The price to the consumer was 4,100-4,200yuan/t, which worked out as $10-15/t cheaper than Indian drums.
On the domestic market, offers to sell stored imported asphalt have been heard at lower than the import price of when it was bought. This indicates that people are becoming anxious about the delays in demand that are occurring and that they need to start clearing their stocks. Refineries around China continued to hold onto their posted prices. Singapore feels far away from China and demand here is still very strong. Although price rises have stalled here, an official from the refinery in Liaoning in north China expects the price to go up to 4,400yuan/t in July, when construction work becomes more frantic.
India
An Indian trader has sent samples to China as part of ongoing negotiations over
a deal to import Indian drums into China. If the deal goes ahead, the Indian
side have estimated a price of $380-382/t on a cfr basis to east China. The prospect of India exporting to China has arisen due to the determined efforts of
traders. During the off season, production continues in India’s west — creating a surplus. To transport this within India is expensive, so with
demand proving to be so great in China during India’s off season, it is felt
there is a good opportunity to export.
In India the monsoon continues to work its way north, slowly bringing construction projects to a halt. There are still two weeks to go until the usual end of the paving season for the entire country. For the first time in three months the price has not been increased on the fortnightly basis. But expectations are high that the price will be raised on 1 July, even though that is the predicted end of the paving season. The price increases are in order to cover production costs and to off-set losses from selling government subsidized motor fuel products.
Send
comments to feedback@argusonline.com
ntwb
