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Watch: Market Movers Asia, May 31-June 4: China's new consumption tax sends ripples across oil, petrochemical sectors

On this week's Platts Market Movers Asia with Associate Editor Ashna Mishra: oil companies in China are expected to cut gasoline and gasoil exports in June by up to a quarter from May following Beijing's plans to impose a consumption tax on mixed aromatics imports from June 12.

More highlights in Asia's commodity markets:

*China's new consumption tax to impact the country's MTBE imports

*Volatility in metals market seen to extend into June

*Thermal coal prices seen on an uptrend

View Full Transcript

This week: China's fuel exports set to fall in June and its appetite for MTBE to decrease, metals prices retreat after a government warning on speculation, and an uptrend expected in Australian thermal coal prices.

But first, in oil, market sources expect China's oil companies to cut gasoline and gasoil exports in June by up to a quarter from May.

Sources said, in an effort to keep more barrels in the domestic market, the companies plan to reduce gasoline exports by 24% and gasoil exports by 18% from May.

This comes after China announced plans to impose a consumption tax on mixed aromatics imports from June 12, which will increase gasoline blending costs.

Most of the country's mixed aromatics imports are used in gasoline blending in south and east China. The tax is also expected to reduce imports of light cycle oil, which could result in a shortage of gasoil in the domestic market.

So, our social media question this week is: Do you think the new tax will result in a drastic fall in China's gasoil and gasoline exports? Share your thoughts on Twitter with the hashtag PlattsMM.

The impact of China's new consumption tax on light cycle oil and mixed aromatics may also be felt in the petrochemical sector. MTBE is one of the major gasoline octane boosters and its imports could be impacted by the reduction in gasoline exports and blending activity.

In metals, all eyes on the impending release of two purchasing managers' indices in China this week, which will reveal the impact of high metals' prices on China's manufacturing sector.

Chinese steel and iron ore prices in May were the most volatile on record. Price fell late in the month after the Chinese government issued a warning against excessive speculation, fearing it could dent in country's economic recovery. What remains to be seen in June is whether this is a temporary pause, or if a sustained price correction will follow.

And finally, in thermal coal, the recent purchase of almost 2 million mt of Australian thermal coal by Taiwan's Taipower via tender could spur an uptrend in Australian coal prices this week. Meanwhile, Indonesian coal prices are expected to remain stable amid limited Chinese demand and supply tightness.

Thanks for kicking off your Monday with us. Have a great week ahead!