South China gasoline blending margins to drop next week

SINGAPORE (ICIS)–Gasoline blending margins in south China are likely to narrow next week on the back of expectations of lower blended gasoline prices, market participants said.

On 8 February, the blending margins rose by 8.1% or Chinese yuan (CNY) 63/tonne ($10/tonne)from a week before, due to lower costs, according to ICIS data.

Blending costs fell by CNY113/tonne during the period amid mixed blendstock prices.

Refiners raised methyl tertiary butyl (MTBE) prices as they have low sales pressure. Off-spec gasoline prices rose slightly on reduced supply. C5 prices stayed flat. Meanwhile, plunging Brent crude values sent prices of mixed aromatics, naphtha and blended gasoline lower.

Blended gasoline prices dropped by CNY50/tonne week on week, despite restocking demand ahead of the Lunar New Year holiday (15-21 February).

Blended gasoline prices may drop further next week, as pre-holiday stockpiling activities will come to an end and domestic fuel retail ceiling prices will be adjusted downwards on 10 February.

ICN