The Asian naphtha benchmark flat price hit a 31 month high, nudged higher on a persistent gain in crude as per Platts. At the close Wednesday, MOPJ was assessed at US$1022.63/mt, a gain of US$7.88/mt from Tuesday, and up US$37.13/mt from a week ago. MOPJ was last higher on August 28, 2008, when it was assessed at US$1026.75/mt. The gain in flat prices came amid a slide in cracks, as H1-June crack against June Brent futures finished US$3.10/mt lower to US$109.90/mt, a 5-week low.
H2-May demand is estimated to be better than H1-May when some cargoes were seen rolling over from the previous half-cycle following the earthquake in Japan. The limited supply from the West for May was mostly heavy grade naphtha for Japan's gasoline pool. Also, supply from the Middle East has also been capped due to refinery maintenance. Later part of May will see some of these crackers returning in the later part of May post-turnarounds in April, and also refinery trouble in Indonesia [from the outage at Pertamina's Cilacap refinery]. While the higher flat prices for naphtha had initially narrowed petrochemical margins for end-users and threatened to mute naphtha demand as a cracking feedstock, petrochemical prices have now started to edge higher.
At the Asian close Wednesday, FOB Korea benzene prices rebounded US$7.50/mt to US$1176/mt, as downstream styrene monomer prices climbed a sharp US$24/mt over the same period to US$1405/mt FOB Korea on the back of short covering activities, Platts reported Wednesday.