Naphtha prices in Asia have plunged to 14 week-lows as cracks hit their lowest in two months amid pressures from demand cuts triggered by maintenance shutdowns at petrochemical plants.
South Korea's Honam bought three cargoes of 67,500-90,000 tons for March arrival at premiums a tad over US$7/ton to Japan spot quotes on C& basis. This is a sharp contrast to the premium of US$18/ton C&F it paid on Jan. 21 for 50,000 tons of naphtha for H2-February arrival. This reflects falling sentiment in the market, but a tightly shut arbitrage window will temporarily cushion the impact. Though there were not many offers in the market, South Korean demand for H1-March parcels is almost over.
Kuwait Petroleum Corp (KPC) is currently in talks with Asian buyers to renew the April 2010-March 2011 term contract.