S Koreas Nov TSR 20 rubber imports up 6% on year amid strong auto sales   by Xg123

South Koreas November imports of technically specified natural rubber, or TSR, rose nearly 6% year on year to 29,608 mt, customs data released December 15 showed.

More than 43% of total imports, or 12,894 mt, came from Thailand, compared with 11,359 mt in the corresponding month of 2010.

The higher South Korean imports came amid higher vehicle sales to overseas markets.

For instance, Hyundai sold 49,610 vehicles in the US in November, up 22% year on year. Meanwhile, the combined sales of South Korean auto makers stood at 713,329 units in November, compared with 634,303 units the year before.

SOUTH KOREAS NOV TSR IMPORTS (mt) 2011 2010 Thailand 12,894 11,359 Indonesia 11,062 10,194 Malaysia 3,419 4,070 Vietnam 1,352 1,568 Myanmar 201 – Cambodia 217 583 Philippines 463 151 Total 29,608 27,935

The Northwest European MTBE factor is likely to retain its unseasonal strength until the end of 2011 and into the new year despite relatively weak demand for the octane booster, according to market sources.

The MTBE factor — which measures the strength of MTBE relative to Eurobob gasoline on a FOB ARA basis — was assessed at 1.2490 on Thursday, 0.1509 higher than the monthly average of 1.0981 for December 2010.

The average for the month so far is 1.2272, and if the factor retains similar strength until the end of the year, December is set to be the strongest month in 2011.

I cant see it [the factor] shifting in either direction, probably a good way into January… supply remains tight, [were] not going to see people sell an awful lot, one trader said.

A second trader said, I think product is backwardated going into March or so… I do not see the current strength easing any time soon.

MTBE is traditionally weaker in the winter months, as gasoline demand dips following the end of the summer driving season and other blending components that have less favorable characteristics for use in the warm summer weather become more attractive.

In addition, a shrinking gasoline-naphtha spread, which has discouraged the use of octanes alongside naphtha in gasoline blending, and the current high MTBE factor, have caused incremental demand from blenders to fall off, sources said.

The gasoline-naphtha spread was assessed at $26.25/mt Thursday, and has averaged $34.25/mt in December so far, whereas the average in each of the previous six months has ranged between $52-71/mt.

However, inventories throughout Europe are depleted, leaving sellers just able to cope with this reduced level of demand, sources said.

The first trader said there is good demand, [but were] running close to empty.

A number of factors have combined to create this situation of depleted inventories.

Since late in the second quarter, European steam crackers have been running at lower utilization rates due to punitive cracker economics, which has reduced the amount of MTBE feedstocks on the market and limited the amount of MTBE that is able to be produced.

Current contract steam cracker margins in Europe have turned negative for the first time in 2011 following a dip in olefin contract prices for December.

This feedstock shortage was compounded by recent low water levels on the Rhine, which hindered transportation of feedstocks from crackers to MTBE production plants on Northwest Europe.

External resupply has also been limited, as swing production in the Middle East continues to go mainly East and a period of prolonged backwardation in the European MTBE market has left participants with little incentive to store product in recent months.

Its very unlikely that well see factor at 1.15 again in the near future, a third trader said, adding that the factor is probably supported around the 1.20 level on current fundamentals.

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