New York
An accumulation of pressures have taken their toll on the Singapore price which is now hovering at around $280/t for bulk cargoes on a fob basis. One seller laid the blame at the door of the Thais who he claimed were selling for $270-275/t on a fob basis. Other pressures include China’s ongoing loss of appetite, the bad weather across the region, and excess supply in Singapore. There is also the perpetual problem with the lack of ships. The truck price to Malaysia has also fallen to between $250-260/t as some refiners seek to shift the volumes. One big refiner was pleased to hear that Petronas had increased its domestic selling price by 100 ringgit. Recently there has been some relief to be found in Indonesia, which has seen a rise in demand. Sellers in Singapore mentioned strong buying interest from traders who deal with Pertamina.
High-sulphur fuel oil prices lost ground after crude futures extended losses in Access trade. Regional supplies underpinned the weak sentiment, as Singapore stocks stand near tank top levels, but down from the record high of the previous week. Official port statistics recorded fuel oil stocks at 14.7mn bl compared with the record 15mn bl on 2 August.
Malaysia
A very large domestic end-user said Petronas raised their selling price by 100 ringgit to 1100 ringgit/t on Monday. It was unclear what prompted the move but it left Singapore bitumen cheaper. The end-user was buying up a lot of Exxon volumes this week and for the week ahead. Caltex were reported to have cut down their regular supply to a customer because they had a big shipment to make elsewhere. The Malaysian market is still awaiting a pick-up in domestic demand.
Indonesia
Enquiries were being made by buyers for Pertamina who wanted deliveries for the end of the year. It was noted that demand had picked up somewhat. Pertamina was said to be offering at $350/t, leaving the door open for sellers from Singapore who could be competitive to the east coast of Sumatra. The peak paving season is in October and November. but one player has an expectation that projects could be delayed, although it is unclear why.
Thailand
The price for bulk on an fob basis has come down since last week, with sellers citing low prices in Singapore as the principal reason. A Thai seller said customers had informed him that prices in Singapore were as low as $270/t on a fob basis. So the offering price in Thailand is now $280/t although neither TPI nor Thai Lube Base has any spot availability. TPI said this is the case until September. On the domestic side, the market saw some improvement this week with increased lifting as the weather improved and some construction started up.
South Korea
A longer than usual rainy season has dampened domestic demand in South Korea. Unfortunately there has not been much relief found through spot trade due to this year’s unusually low demand at this time from China. South Korea normally has its peak paving season between August and December, but this year demand is being held up by the weather. The current spot price for bulk was said to be between $290-300/t, no change from last week.
Taiwan
CPC claimed to be unaffected by other changes in the region and were happy to remain the seller with the highest price in the region. CPC’s tender was released this week for 100,000t for delivery between August and December. CPC felt that current cfr prices for south China were over $360/t.
China
Little has changed in China and at the end of the week yet another typhoon, the biggest yet, was striking south eastern regions. Petrochina’s Wenzhou refinery in Zhejiang, which was directly in the path of the latest typhoon, cut its operating rate by 50pc on 10 August. There is optimism that the price will eventually go up when the weather clears and demand returns. A notional assessment put Guangdong prices at around Yn3,500/t, in east China at Yn3,600/t and north China at about Yn3,900/t. North China only has about two months before paving projects must end due to the cold that begins to set in during October.
Wenzhou refinery was selling at Yn3,300/t. Sinopec Luoyang, in Henan, kept prices steady at Yn3,710/t and Yn3,630/t for AH-90 and AH-100. Actual selling prices at CNOOC Taizhou, in Jiangsu, were unchanged at Yn3,600/t but were said to be under pressure because of high stocks. Petrochina Gaofu refinery in Guangdong offered AH-70 and AH-90 at Yn3500/t for truck, rail and ship deliveries. Jinzhou asphalt refinery kept prices unchanged at Yn4,150/t with real deals done at Yn4,000/t. A trader in Guangdong said he had seen offers from Thailand and Taiwan of $350/t cfr this week.
India
There is practically no bitumen business being done in India now. Some refineries might do maintenance on their own roads. Currently production of bitumen is very much reduced and what is available is being packed into drums. This year’s monsoon has been very heavy so far with more flooding than normal. This could lead to a greater than average requirement for bitumen for road repairs. But what really affects demand is the speed at which government funding is made available for projects.
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