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Asia Gasoline-MTBE prices stable as China seeks barrels |
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| SINGAPORE: March 25, 2004 | ||
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SINGAPORE - Prices for methyl tertiary butyl ether (MTBE) for prompt cargoes were stable over the last week as inquiries from China and tighter supplies countered slack regional demand, traders said yesterday.
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Prices for the gasoline octane booster, which helps to reduce smog, could rise in coming weeks on support from dwindling South Korean supplies and on an opportunity to ship cargoes to the United States, where gasoline demand is building up to the peak summer driving season, traders said. They said early March free-on-board (FOB) Singapore prices were $320-325 a tonne, steady from last week. "Chinese demand is coming back and their bids are beginning to look workable," said a Malaysia-based trader, referring to the return in demand from the region's biggest buyer after few purchases in January. Chinese buyers, who took in bumper supplies late last year ahead of the Lunar New Year, were beginning to seek March cargoes, but nothing had been sold so far, traders said. Delivered prices into East China were steady from last week at about $350 a tonne on a cost-and-freight (C&F) basis, and South China C&F Huangpu prices were flat at $345. Traders had heard no cash deals done in the last week. Prices were underpinned as supplies slowed from Esso (Thailand) PCL, a Thai refinery unit of U.S. oil giant ExxonMobil Corp (XOM.N: Quote, Profile, Research) , which shut its 170,000 barrels per day refinery in February for a month of maintenance, traders said. But Thai demand was not expected to spike as blenders Alliance Refining Cp (ARC) and TPI (TPI.BK: Quote, Profile, Research) had ample stocks to tide them over until tenders for 1,500-tonne lots set to be issued in April, traders said. Traders said supply from South Korea's Hyundai was expected to tighten as the firm built stocks before planned maintenance in May, traders said. South Korea's YNCC was seen selling up to three spot cargoes every two months, but if prices continue to ease from highs hit in January buyers may baulk at YNCC's price formula, which is based on the previous month's average, they said. If Korean buyers pass on YNCC cargoes, the firm may have to look to the United States where prices are expected to be higher than in Asia through the summer, they said. Beginning on April 14, Asian traders said they would be watching for weekly data on U.S. imports of MTBE and U.S. MTBE-blended gasoline stocks. U.S. Gulf Coast prices are now $400 a tonne and it costs about $40 a tonne to send 10,000-15,000 tonnes there from Asia. "The arbitrage is workable now for me now, but I just don't have the cargoes," a Singapore based trader said. Malaysia's Petronas sends one 10,000-15,000-tonne term cargo to the United States every two months, traders said.
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Story by Jonathan Landreth
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REUTERS NEWS SERVICE
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