Asia's naphtha prices have risen to near month highs, and cracks are around their highest in 10 days. But traders said the stronger cracks were supported by the higher naphtha price, which was in turn lifted by firm raw material crude costs and not fundamentals, as per Reuters.
US$1.25/ton premium paid by South Korea's Honam for 100,000 tons of open-spec grade naphtha for H2-November for Yeosu, reiterated the weak sentiment. Another two cargoes for the same arrival period was bought at Daesan at premiums of about US$2/ton. Premiums paid for Yeosu were lower compared with what YNCC had paid last Friday for 50,000 tons at US$1.75. The market failed to rebound, defying earlier expectations. Taiwan's Formosa has delayed the restart of its 1.2 mln tpa No. 3 cracker to either late Monday or Tuesday this week from early October following a planned maintenance which started in mid-August. In the event of an early restart, Formosa is unlikely to buy spot naphtha for November. They have been buying a fair bit of liquefied petroleum gas (LPG) instead. LPG can be used to partially replace about 5-15% of naphtha used in some Asian crackers. The price for front-month H1-December open spec naphtha stood at US$934.50/ton, highest since Sept. 21. Cracks for first-half December increased by over six dollars to US$87.97/ton.