Singapore—A sharp rebound in the Asian gasoline complex last week Feb. 1-5 has helped to lift the mood in the regional blendstocks market as traders are increasingly optimistic on the near-term outlook for blending material.
FOB Singapore 92 RON, 95 RON and 97 RON gasoline values have risen to multi-month highs and were assessed at $65.71/b, $64.27/b and $65.68b, respectively, at the 0830 GMT close of Asian trade on Feb. 5, led by a stronger US RBOB-Brent crack spread as well as stronger international crude markers.MTBE**Firmer gasoline blending activity and a strong downstream methyl methacrylate market propelled the Asian MTBE FOB Singapore marker to a near 11-month high to be assessed at $614.90/mt at the Feb. 5 Asian close, Platts data showed.
**The MMA CFR China marker was assessed $45/mt higher on the week at $1,530/mt on Feb. 5, Platts data showed. The resumption of construction activity during spring in Asia's northern hemisphere, as well as a recovery in the electronic goods and automotive sectors had boosted the Asian MMA market.
**In December 2020, China produced 1.062 million cars, 11% more year on year, while cement equipment output totaled 36,718.9 mt, which although was 18.5% lower on the year, was 27% higher from November, China's National Bureau of Statistics data showed.
ISOMER MIXED XYLENES**Isomer-grade mixed xylene had risen to more than a one-year high on Feb. 5 at $636/mt FOB Korea on the back of higher upstream prices and a firmer paraxylene complex, while MX production margins have also improved as the spread to naphtha stood at $89.90/mt in the week ended Feb. 5, up from $75.40/mt a week ago.
**Additional price support is expected in the near-term as traders eye peak seasonal summer demand in the northern hemisphere and tightening supply due to upcoming maintenance in Q2 and mid-year.
TOLUENE**Tight toluene supply in Asia has brought about a more active search for blending material among market participants, even as COVID-19 concerns continue to weigh on overall demand for high-octane gasoline across the region.
**The FOB Korea toluene marker, drew closer to the FOB Singapore MTBE physical, at minus 10 cents/mt on Feb 5, Platts data showed.
** With both products seeing a sharp uptick in prices over Feb. 1-5, market participants have been monitoring the spread between the two as price is the main driver influencing the components' competitiveness for gasoline-blending, market sources said.
NAPHTHA** The Singapore reforming spread, which is calculated as the difference between FOB Singapore 92 RON gasoline and the FOB Singapore naphtha derivative, rose $1.13/b on the week to reach a one-month high of $6.03/b at the Asian close on Feb. 5, Platts data showed.
** The spread widened amid a divergence between gasoline and naphtha markets, with the latter facing downside pressures as additional cargoes from the West of Suez have led to ample supply for the February delivery cycle.
** The spread between CFR Taiwan-China paraxylene marker and CFR Japan naphtha physical even narrowed $3.25/mt day on day to $185.58/mt on Feb. 5, Platts data showed.
** PX-naphtha margins averaged higher in January at $171.61/mt compared with the December 2020 average of $153.19/mt, and while the spread has averaged $193.534/mt over Feb. 1-5, it remains below the typical breakeven $280-$300/mt.
ETHANOL**In the Asian ethanol market, eyes were on the Philippines' buying activity for Q2, which was heard to have started with purchases recorded for late Q2, while purchases for the late March to April period were still ongoing. Buying indications for late-March to April were pegged at $490/cu m CFR Ulsan.
**US ethanol delivered to the Philippines was assessed at $521/cu m on Feb 5, up 1.82% on the week due to stronger front month US futures, which rolled over in a steep contango from January to February.
**The stronger US futures even outweighed a bearish stock report, which showed that US domestic ethanol inventories had increased 714,000 barrels in the week to Jan. 29 to its highest level since May 1, 2020, Platts reported earlier.
