Singapore 380-centistoke Dec/Jan spread hits over 2-month high

The market structure is also in the negative.

The price difference between the Singapore 380-centistoke December and January swaps widened to a more than two-month high on Thursday, an unusual peak towards the end of the year that is leaving many baffled, traders said.

The 380-cst December/January timespread reached $5 a tonne on Thursday, the highest since September 15, Reuters data showed.

"The Dec/Jan spread isn't making any sense to me or anyone I talk to," said a Singapore-based trader.
It is unusual for the Dec/Jan timespread to trade at levels above $4 a tonne persistently for accounting reasons, as most companies prefer to keep inventory levels low, typically spurring a sell-off that would pressure premiums.
The market structure into next year, except for January, is also in the negative, signalling an overall weak market outlook that does not tally with the numbers now, traders said.

"The only thing I can think of is with the spot ex-wharf being so high, people are thinking this will continue into December," the trader said.

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