Southeast Asia steps up Covid curbs as cases rise again

Governments in southeast Asia are stepping up restrictions to curb a rise in regional Covid-19 cases, potentially hitting commodity demand.

Malaysia has banned all inter-district and interstate travel from today until 6 June, covering this week's Eid al-Fitr holiday when people usually travel to visit relatives. The ban comes after Malaysia halted flights to and from India on 28 April following a surge in infections in the south Asian nation that has raised concerns about the emergence of new Covid-19 variants.

This is the first time such travel restrictions have been imposed nationwide since March last year, when Malaysia had around 2,800 coronavirus cases. This compares with 440,677 cases and 1,683 deaths as of today, according to Johns Hopkins University data.

The latest restrictions will affect markets as diverse as used cooking oil (UCO) and bitumen, market participants said. The travel curbs may hit collections of waste biodiesel feedstock UCO, which halved during the movement control order (MCO) imposed when Malaysia was hit by a first wave of the pandemic last year. The new restrictions are less severe, although people may choose to extend their breaks after the Eid al-Fitr holiday, potentially weighing on collections.

Road construction will likely also be hit by Malaysia's latest curbs, which may limit bitumen tanker truck movement. Bitumen demand was already stable-to-soft last week as road projects began to wind down for the holiday, although they are expected to resume from around 20 May.

The impact on road fuel demand is less clear. Malaysian driving activity is roughly in line with pre-pandemic levels, according to mobility data from US technology firm Apple that compare direction requests with a mid-January 2020 benchmark. Driving activity slumped by as much as 70pc during the first MCO, the data indicate.

Infections, measures intensify

Singapore, the Philippines, Indonesia and Vietnam have also seen a rise in coronavirus infections, leading to stricter containment measures.

Singapore last week reimposed tougher restrictions on gatherings and business activity after a sudden spike in cases. This came after it banned crew changes involving non-residents with a recent travel history to south Asia. Singapore has recorded over 62,000 coronavirus cases and 31 deaths since the start of the pandemic.

The Philippines has also tightened controls on travel, banning passengers from India at the end of April as it battles more than 1.1mn infections and 18,472 deaths as of today. The country is a net importer of jet fuel, gasoline and gasoil, but the planned restart of its 180,000 b/d Bataan refinery at the end of May or June may pressure its import demand, which has already been hit by lower domestic consumption during the pandemic.

The epidemic is worse in Indonesia, where 1.7mn cases and around 47,000 deaths have been recorded. This compares with 2,092 confirmed cases and 191 deaths last April when stricter Covid-19 measures hit the country's oil product demand. Indonesia is Asia-Pacific's largest gasoline buyer with imports of 8mn-10mn bl/month (263,000-330,000 b/d).

The country has restricted domestic travel this month to counter the spread of Covid-19.

Cases are also rising in Vietnam, one of the early success stories in its management of the pandemic. Prime minister Pham Minh Chinh earlier this month warned of a "high price" to pay for negligence in the fight against Covid-19, ordering localities to stop mass gatherings, crack down on illegal immigration and accelerate the pace of vaccination.

Vietnam is experiencing its third wave of Covid-19 cases, prompting the government to reimpose restrictions and movement curbs in the country. Cases are still relatively low by global standards, with 3,412 cases and 35 deaths as of today, up from 218 cases and no deaths as of early April last year, according to World Health Organisation data.

The new regional restrictions are being driven partly by concerns about the explosion of coronavirus cases in India, and the potential for new Covid-19 variants that first emerged in the country to spread more widely.

India reported another 366,000 new cases yesterday, taking the total to 22.7mn. The capital Delhi has extended its lockdown until 17 May, while other states, including the most heavily-affected region Maharashtra, have imposed similar restrictions. Concerns about new variants are also driving tougher restrictions in Japan.