Tighter supplies lift Singapore trucked bitumen prices
Singapore trucked bitumen prices have inched up this month because of tighter supplies in the city-state, despite relatively moderate consumption by key consumer Malaysia.
Singapore-origin bitumen on tanker trucks were sold to Malaysia at around $485-497/t ex-refinery during the week of 16 August, up by $20/t at the high end from $475-477/t ex-refinery during the first two weeks of July.
Malaysian bitumen demand has been supported by several post-Hari Raya Puasa projects in full swing in this year's second quarter and pent-up demand from the previous year's incomplete projects. But market participants described demand as moderate as many road projects were affected by intermittent rainy weather in some regions, including Johor Bahru and Kuala Lumpur, and because of a change in a diesel subsidy policy in June.
Bitumen-related businesses, like tanker truck transportation and premix operations, no longer get diesel subsidiesaccording to the new regulations, dealers told Argus, adding that many contractors took to the market sidelines or slowed operations because of the additional costs. Diesel is heavily used in premix operations, a key step before laying the road, where bitumen is blended with gravel, sand and other aggregates.
Overall bitumen availability in Malaysia is tight as a major refinery in the region cut production and halted bitumen sales since June. This pushed dealers to seek more Singapore-origin tanker truck cargoes but production cuts at refineries in the city-state limited availability.
Limited supplies from Singapore and the prospect of a demand recovery in southeast Asia for this year's second half have continued to support seaborne prices. Argus assessed weekly fob Singapore ABX 1 prices at $440/t on 16 August, up from $426/t fob Singapore for the same period last month.
Singapore tanker truck bitumen cargo prices are typically at a $10-15/t premium to the ABX 1 but trucked prices are about $50-60/t above the ABX 1 in August, widening the price gap. The weekly Singapore tanker truck prices were assessed by Argus at $491/t ex-refinery on 16 August.
Malaysian tanker truck traders are expecting Singapore equivalent prices to fall in the coming weeks on expectations that production will increase. Singapore refiners are likely boosting production as the gap between seaborne bitumen prices and high-sulphur fuel oil prices is narrowing, indicating better margins for bitumen, market participants said.
Refiners informed truck cargo buyers that they will soon be able to purchase at least 5-6 loads a day, up from 1-2 loads a day so far, a few dealers told Argus.
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Nigeria sees significant gasoline output by November
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US housing construction softens in July, flux steady
US housing construction softens in July, flux steady
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