Bitumen prices in the key Singapore market have firmed for a third consecutive week, supported by tight supplies and production cuts.
Rising crude oil futures and feedstock 180cst high-sulphur fuel oil (HSFO) prices this week encouraged Singapore-based sellers to seek higher prices.
A key Singapore-based refiner announced a 20 percent cut in its operating rates for December, which could extend into January 2021 as well. The cut was driven by squeezed margins caused by a very narrow spread between fuel oil and bitumen prices in the past few weeks.
Discussions took place this week at close to $300/t fob Singapore, the first time prices have reached such levels since late September. Argus assessed prices at $295/t fob Singapore on 20 November, with this week’s prices rising above this level.
Production also remains restricted at ExxonMobil’s 100,000-120,000 t/month unit in Singapore, where output has been curbed since the second quarter this year.
Spot supplies have tightened for December-loading cargoes from Singapore as a result.
Buyers from key countries such as Vietnam and Indonesia remained on the sidelines following the increase in offers, resulting in a slowdown in trading this week.
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