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Asia octane: Key market indicators Oct 18-22

The Asian market for octane blendstocks entered the Oct. 18-22 trading week on a firm note, with naphtha demand expected to hold on the back of strong gasoline demand and the MTBE market also expected to be supported by bullish crude and gasoline prices.

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Higher demand in China for toluene and isomer-MX was expected to support regional prices, while ethanol prices were also expected to rise amid a supply shortage.


** The start of the H1 December delivery cycle this week is expected to see extended support from firm demand from Asian steam crackers on the back of positive olefin margins. Firm sentiment was reflected in the CFR Japan naphtha physical crack against front month ICE Brent crude futures rising $4.25/mt week on week to $147.70/mt at the Oct. 15 Asian close after touching a seven-year high at $147.725/mt at the Oct. 14 Asian close, S&P Global Platts data showed.

** Demand for naphtha was steady as the key CFR Northeast Asia ethylene to C+F Japan naphtha spread widened $4.375/mt week on week to $381/mt at the Asian close Oct. 15.

** A stronger gasoline market against naphtha was reflected in the reforming spread – the difference between Singapore 92 RON gasoline and Singapore naphtha derivative – touching a three-month high at $9.68/b at the Asian close Oct. 15, Platts data showed. This key reforming spread was last higher 16 weeks ago on June 24 at $9.99/b. The wider reforming spread would propel demand for naphtha as a gasoline blendstock, which has already been supported by positive olefin margins.

** In the aromatics sector, slashed output at paraxylene units saw the CFR Taiwan price hit a two-year high at $967.67/mt at the Oct. 15 Asian close; it was last higher April 24, 2019 at $971.67/mt. The spike widened the key PX CFR Taiwan/China marker to C+F Japan naphtha cargo spread by $9.625/mt day on day and $3.715/mt week on week to $183.67/mt Oct. 15, Platts data showed. However, it was still below the typical breakeven level of around $280-$300/mt, which was likely to motivate splitters to keep run rates low, sources said.


** Asian MTBE prices are expected to follow upstream and gasoline price trends in the Oct. 18-22 trading week after hitting a more than a two-year high last week.

** High LPG prices continue to raise Chinese MTBE producers' feedstock costs as many use propane or butane to make isobutylene, a precursor in the MTBE production process.


** Toluene prices across the regions look set to improve further with increasing demand from China and a revival of market activity in Southeast Asia.

** Chinese cargoes are being sold at premium prices as port congestion and long waiting times that incur large demurrage bills add to tightening toluene supply.

** Improved margins for on-purpose benzene production in 2021 compared with 2020 have led to more toluene being consumed by benzene producers in South Korea, with India being the largest buyer of South Korean toluene in September at 8,203 mt, Korea Customs Service data showed.


** With upstream prices still firm, isomer-MX prices are likely to push to new multi-year highs in the coming week as the domestic market in China remains tight on supply.

** Gasoline blending demand was heard to be one of the factors supporting MX prices in China's domestic market, along with a shortage of blendstocks, sources said.

** The outlook for the downstream PX and purified terephthalic acid markets was not providing clear direction to MX for the moment.


** US ethanol delivered to the Philippines rose to $683/cu m Oct. 15 from $673/cu m the week before.

** US ethanol prices held firm in the week ended Oct. 15 as overall supply remained tight despite an uptick in production.

** Demand for gasoline in the Philippines was seen to be increasing as curfew hours are reduced in the Metro Manila area. Less buying of foreign ethanol was reported as domestic buyers continued to offtake local supplies.

** The offer level for imported ethanol in the Philippines remained steady on the week at $690/cu m CFR Philippines for December arrival.

W-o-W Change
Price per Ron ($/mt)
Price per Ron ($/cu m)
FOB Singapore 91 RON non-oxygenated
FOB Singapore 92 RON oxygenated
FOB Singapore 95 RON oxygenated
FOB Singapore 97 RON oxygenated
null FOB Singapore Naphtha
FOB Korea Toluene
FOB Singapore MTBE
FOB Korea Isomer-MX
CIF Philippines Ethanol
$683/cu m