Singapore, 4 August (Argus) —
Singapore
Prices are up by $9/t to $520-530/t fob for bulk cargoes on the back of healthy demand by Indonesian buyers. Drum prices have increased more significantly by $18/t to $630-640/t because of very tight availability. Refiners here have sold most of their August cargoes and are likely to target buyers in southeast Asia for any remaining volumes.
Offers at the end of this week for ex-refinery truck cargoes to Malaysia are up to around $520/t but no deals were heard to have been done yet. The last traded cargoes were heard to have been around $490-495/t fob. The latest offer prices have no doubt been boosted by strong cargo prices.
Malaysia
Prices moved up with offers by the state-owned producer at around 1,780 ringgit/t ($544/t) while other suppliers are making offers as high as 1,800-1,820 ringgit/t. Despite demand being lukewarm because of the recent surge in prices, suppliers have increased prices as a result of rising production costs.
The state-owned supplier is still in negotiations to secure around 4,500t in imports for August delivery with both Singapore and Thai sources. The additional volumes are meant to make up for reduced domestic production next month.
Indonesia
Buyers boosted prices in the region. Some buyers were heard to have taken August cargoes from Singapore suppliers at around $530/t fob this week. Despite domestic demand still dampened by negotiations between local contractors and government officials with regard to funding issues, the state-owned supplier is seeking imports to make up for a cut in production.
Thailand
Prices jumped by $20/t to $500-510/t as refiners have already sold most of their August cargoes at similar levels. Most of the demand has originated from southeast Asian buyers as Chinese demand has weakened in July.
Refiners have been focused on exports for July and August because of comparatively lower domestic price of around $470/t. One of the country's largest refiners has sold around 2,000t of product domestic monthly for July and August, down from the 10,000t sold to domestic buyers in May and June.
Vietnam
Most buyers here have concluded their purchases for August cargoes with a large percentage of imports coming from Thai suppliers next month. The high Singapore prices have discouraged buyers this month and one local dealer was even heard to have secured a Taiwanese cargo for August instead.
Drum prices to Vietnam have increased by $20/t in line with a similar increase in Singapore. But volumes traded are limited because of tight availability in Singapore.
South Korea
Availability continues to be tight here with hardly any new offers heard for the Chinese market. Most producers here are concentrating on their term contract commitments because of the comparatively lower spot prices that Chinese buyers are willing to accept. Bulk prices moved up by $7/t, in line with other north Asian suppliers.
China
Market sentiment has been poor. Domestic refineries have largely kept their prices unchanged from last week, except for two to three refineries in east China that have slashed their prices by 50-100 yuan/t ($7-15/t). The Olympic Games that will start on 8 August in Beijing has resulted in a temporary stop to some construction projects, especially in and around Beijing in provinces such as Hebei. In east China, the demand is weak because construction activity is mainly focused on road repairs instead of big construction projects. In south China demand is also muted. While demand in southwest China continues to be healthy, refineries in south China such as Petrochina Gaofu are still unable to transport much asphalt to the southwest because of rail capacity restriction. The restrictions on rail capacity are believed to have been put in place to focus on transporting cement or steel for home reconstruction after the Sichuan earthquake.
Despite the corrections in recent weeks, fuel oil prices continue to be much higher than asphalt in China. Refineries here still prefer to produce more fuel oil rather than asphalt and are likely to keep asphalt production low in the country. Cfr prices for imported grades were unchanged at $510-520/t but demand is showing signs of weakening. The low domestic supplies have given some support to cfr prices. China's main exporter South Korea may reduce its export in August to China because of its strong domestic demand and lower than acceptable cfr prices.
Taiwan
The domestic price on the island has climbed to 19,500 New Taiwan dollars/t ($638.20/t). The price increase in the last two weeks has not dampened the strong demand, which remains robust because of ongoing repair and rebuilding projects in the aftermath of Typhoon Fung-Wong. The typhoon hit the island on Monday. Formosa has not yet decided on its export availability for September.
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