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Asia octane: Key market indicators this week March 8-12

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Asia octane: Key market indicators this week March 8-12

Singapore — The Asian octane market is expected to stay supported throughout the week March 8-12, as international crude values rise and tight supply set to buoy an upward momentum in blendstock prices even as some participants stay on the sidelines awaiting fresh directional cues on regional supply-demand dynamics.

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MTBE

**Asian MTBE will continue to take its cue from the bullish gasoline market, which has stayed firm on the back of the strong US RBOB-Brent crack spread and improving regional demand.

**Asian MTBE had reached a 14-month high of $694/mt FOB Singapore on March 5, while the MTBE gasoline blending value was assessed at $98.745/mt. The MTBE production margin was estimated at $87.154/mt on March 5, Platts data showed.

**Tight supply of downstream methyl methacrylate in Asia will also support the region's MTBE complex at least through Q2 given the continued outflow of MAA to the US ahead of scheduled maintenance of Asian MAA plants in the same quarter.

NAPHTHA

**Supply tightness and firming crude prices will lift the Asian naphtha complex, but narrowing inter-product spread will likely force blenders and splitters to stay on the sidelines this week.

**The Singapore reforming spread -- the difference between FOB Singapore 92 RON gasoline and the FOB Singapore naphtha derivative -- fell 70 cents/b over the week of March 1-5, dropping from a near 10-month high of $7.50/b to close at $6.80/b on March 5, Platts data showed.

**The spread between CFR Taiwan/China paraxylene marker and CFR Japan naphtha physical also narrowed $6.50/mt day on day to $248.83/mt on March 5, Platts data showed. The margin remains below the typical breakeven of $280-$300/mt, and splitters were unlikely to plan higher run rates due to market volatility, a source said.

TOLUNE

**The Asian toluene market is expected to follow benzene price movements this week as participants consider exporting cargoes due to favorable conditions.

**The weak demand and ample inventory have started to plague the domestic Chinese market, while India, another major regional player in the Asian toluene market, was heard with relatively stable inventory levels.

**Both buyers and sellers are likely to remain on the sidelines, with the bid and offer spread having widened over March 1-5, market sources said.

ISOMER-MX

**Sluggish Chinese domestic demand will remain a drag on the ISOMER-MX complex this week, with the FOB Korea benchmark having tumbled $51/mt to $753/mt in the week ended March 5.

**The spread to naphtha had narrowed last week by $71.13/mt week on week. That said, the spread to paraxylene widened $30/mt to $96.83/mt moving closer to PX producers' targeted level.

**Moving forward, traders expect prices to be supported by upcoming turnarounds in China and Japan, against the backdrop of robust crude markers.

ETHANOL

**Key buyers in the Philippines are expected to stay on the sidelines this week, eagerly awaiting a dip in US ethanol resupply economics before committing to making purchases. This is likely to result in more buying for the June delivery cycle, a trader said.

**Prices continue to slip following an increase in US ethanol production, with plants ramping up output after the cold weather that rocked the country. According to the US Energy Information Administration, US ethanol production rose 191,000 b/d to 849,000 b/d for the week ended Feb. 26

**US ethanol delivered to the Philippines was assessed at $535/cu m on March 5, down 2.19% from the $547/cu m assessed on Feb. 26, Platts data showed.

Product
Mar-05
W-o-W Change
RON
Price per Ron ($/mt)
Price per Ron ($/cu m)
GASOLINE
FOB Singapore 91 RON non-oxygenated
$73.97/b
1.55%
91
NA
NA
FOB Singapore 92 RON oxygenated
$72.53/b
1.60%
92
FOB Singapore 95 RON oxygenated
$74.14/b
1.41%
95
FOB Singapore 97 RON oxygenated
$75.29/b
0.87%
97
BLENDSTOCKS
null FOB Singapore Naphtha
$67.76/b
3.55%
72
0.33
2.07
FOB Korea Toluene
$735/mt
-5.41%
115
5.15
8.18
FOB Singapore MTBE
$694/mt
1.61%
115
3.37
3.04
FOB Korea Isomer-MX
$753/mt
-6.34%
113
6.50
10.06
CIF Philippines Ethanol
$535/cu m
-2.19%
118
2.29
3.50