Asian markets are seeing muted spot purchases as the Japanese market is closed for holiday and South Korean buyers are holding back on high offers. As a result, naphtha prices in Asia dipped to a two-session low on Tuesday, while cracks hit a near two-week low, as per Reuters.
Naphtha for front-month H1-May was at US$1091, while cracks were at US$157.3/ton. Despite the temporary dip, sellers are optimistic amid conviction that buyers would soon emerge with strong demand. "Demand in South Korea is healthy on high cracker runs. Buyers are holding back because of strong offers," said a trader. Honam Petrochemicals is expected to ramp up purchases due to ongoing expansion of its 750,000 tpa cracker in Yeosu to million tpa. The South Korean has shut the Yeosu plant on March 1 for 40 days work on maintenance and capacity expansion. Post-expansion, Honam’s average spot purchases would increase to 12 ton.