Firm demand from China for naphtha has kept Asian markets bullish. After buying 90,000 tons, China is seeking additional quantities of naphtha for the last quarter of 2010, probably extending the bull-run until Q1 2011. Unipec, trading arm of top Chinese oil firm Sinopec has bought at least three medium-range cargoes of 30,000 tons each, for Q4 delivery mainly into Eastern China. It is also seeking at least another 55,000 tons for December delivery, after importing 70,000-80,000 tons of diesel for November.
As per Reuters, Unipec is importing naphtha to fill shortfalls in China, a rare move that will sustain the bullish sentiments in the naphtha market driven by ramped up run rates at North Asian crackers. China is plagued by a diesel crisis - The Chinese government cut power supplies to meet a self-imposed end-2010 deadline to save energy. As a result, factories rushed to buy naphtha to fire up electricity generators. This prompted major refineries there to optimise diesel yield at the expense of naphtha, tightening supplies as they run their oil plants at full blast. China is already net short of naphtha.