Mexico Imported more Gasoline From Asia than From the US

Asian refined fuel cargoes are becoming increasingly attractive to buyers in Mexico as high prices from their leading supplier, the US, are rising on the back of a lower supply, in contrast to Asia.

The growing demand during the Holy Week festivities has seen Mexico importing more than 80,000/b of gasoline from Asia, the highest figure since 2017. So far, the country is receiving cargo from Japan, Malaysia, China and Singapore. 

China Customs data showed that China exported 529.72Mb of gasoline to Mexico in January, which is approximately two Medium Range (MR) tankers, up from 258.91Mb in December.

In April 2022, the US constituted 92% of the market share, which has now fallen to 72% due to low volumes of imports this month. So far, the fall has been one of 290Mb, marking the slowest pace of imports in more than a year. 

The reason behind this phenomenon has been the growing demand for gasoline in the US due to the labor strikes in France. A trader based in Singapore told S&P Global, "With the US gasoline prices rising and the reduced inflows from France, Mexico turns to Asia for alternative gasoline suppliers, especially as freight has dropped quite a bit."

The US-RBOB Brent crack stood at $33.92/b at the Asian close on March 28, which was an increase from $32.98/b at the Asian close on March 27. This reflects the rising cost of US gasoline relative to Asian gasoline.

Furthermore, the US is the biggest exporter of Methyl tert-butyl ether (MTBE) to Mexico. However, due to strong demand from South America, an upsurge movement has been witnessed in the price of MTBE, opening a window for China. Market sources mentioned that around 20,000t of MTBE was traded at FOB China at $940/t for H2 April loading to Mexico on March 7.

Kpler data shows that all of Mexico's MTBE imports in 2021 came from the US. However, in the period from June to September 2022, Mexico imported 791,597b of MTBE from the UAE, Qatar, Malaysia, and Taiwan as octane values and MTBE prices skyrocketed to record highs on the US Gulf Coast.

President López Obrador plans for Mexico to be self-sufficient in gasoline by 2024 as gasoline imports cost US$11.9 billion in 1H22, 80.2 percent more in comparison to 1H21.