17 July 2012 09:46 [Source: ICIS news]
SINGAPORE (ICIS)--Prices of August-delivery bitumen from Singapore have been firm because of lower supplies from major producers in the country, market sources said on Tuesday
Spot August cargoes were assessed at $612.50/tonne FOB (free on board) Singapore on 17 July, taking the bitumen/fuel oil price ratio to 0.99, far higher than the usual level of 0.85, according to ICIS.
Export supplies from three major bitumen producers in the country – Singapore Refining Co (SRC), ESSO and Shell – are estimated at 80,000 tonnes, 43% lower than the normal level, according to data from C1 Energy, an ICIS service in China.
SRC will supply only one 4,000-tonne spot cargo in August as it has to keep most of its production to fulfil contract supplies delayed from this month. The company had to postpone deliveries of July contract cargos because a glitch at its production facilities forced it to halt production for the whole month, said traders.
ESSO will produce 60,000 tonnes in August, down by 67% month on month, according to traders.
Some traders said Shell is even outsourcing spot cargoes at high prices to meet its term supplies.
Lower supplies lend upward supports to August prices, despite declining demand from China, which normally takes 30% of Singapore’s exports.
Singapore is the largest bitumen producer in southeast Asia. ESSO, Shell and SRC normally supply a total of 160,000 tonnes/month to the spot market, and 90% of that supply is for export.
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