Falls $2/mt on a trade

Asian MTBE fell $2/mt from Monday to close at $613/mt FOB Singapore  Wednesday on a trade, and outstanding bids and offers during the S&P Global   Market on Close assessment process. The MTBE factor fell to 1.179  Wednesday, same as the pegged level before the MOC process, and was down from 1.18 on Monday. During the MOC process, VitolSG registered an offer for 2kt for February 23-27 at $619/mt FOB, which was brought down to $610/mt before it got booked by Trafigura. On offers, VitolSG also registered two 2kt, order-cancel-order offers for March 7-11 and March 15-19, each at $619/mt FOB, which were brought down to $612.50/mt FOB and $615/mt FOB respectively, without generating any interest at the close. A best offer at $614/mt FOB by Unipec for a 2kt cargo for February 23-27 was preceded by the trade at $610/mt between Trafigura and VitolSG. On bids, Trafigura registered a 3kt, March 2-6 bid at $600/mt FOB, which was brought up to $615/mt, and was left standing at the close. The market structure changed to contango from February 22 to March 6, became backwardated from March 7-11, changing again to contango from March 12-19, on the aforementioned bids, offers and trade on  Wednesday. The recent arbitrage into China has bolstered confidence in the market, with spreads between FOB Singapore and import parity kept at around $60-$100/mt last week. Some traders, however, expressed caution. “Long 95” an MTBE trader familiar with the Southeast Asian market said  Wednesday. A Singapore-based trader said that “market structure should be flattish, perhaps $1/mt to $2/mt apart.” He added that the “front window might be due to distressed sellers, but no idea if it is true.” In related news, gasoline fundamentals weakened slightly, with 92 RON-Brent cracks gaining 41 cents/b to settle at minus 79 cents/b  Wednesday. The inter-RON spreads all thinned on Friday, with the 95/92 RON spread at $2.15/b, the 97/92 spreads at $3.79/b, and the 97/95 RON spread at $1.64/b. The 92 RON, 95 RON and 97 RON prices all fell slightly from Monday’s close to close at $61.54/b, $63.69/b and $65.33/b, respectively. Naphtha lost $1.54/b to close at $53.96/b FOB Singapore. The 92 RON-FOB Singapore naphtha spreads

— which can be used to show the viability of using MTBE as a blend component

— improved to $7.58/b from $6.16/b in the previous assessment day, while the MTBE-naphtha crack was at $157.38/mt, gaining $11/mt from Monday.

 

RATIONALE:

The FOB Singapore marker was assessed down $2/mt from Monday to close at $613/mt FOB Singapore  Wednesday, amid a trade and outstanding bids and offers during the   Market on Close assessment process  Wednesday. The marker takes an average of the 15th to 40th-day laycans. February 23-27 was assessed at $610/mt FOB at the traded level between Trafigura and VitolSG. March 2-6 was assessed at $616/mt FOB, above the best outstanding bid by Trafigura at $615/mt FOB. March 7-11 was assessed at $612/mt FOB, below the best outstanding offer by VitolSG at $612.50/mt FOB, and March 15-19 was assessed at $614/mt FOB, below the best outstanding offer at $615/mt FOB by VitolSG. The MTBE factor fell to 1.179 on  Wednesday from 1.18 on Monday, and was at thepegg ed level before the MOC process.

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