South Korea's Lotte Chemical has bought at least one H1-September naphtha cargo at a premium of around US$5/ton above Japan quotes on a cost-and-freight (C&F) basis, the lowest spot premium paid in the country in about five months, as per traders in Reuters. As per a trader, the low premium indicates a desperate attempt to sell. There are too many unsold cargoes in the market and Lotte Chemical's purchase tender is likely the last from South Korea for H1-September cargoes. The unsold barrels will now be carried over to H2-September delivery and this will keep the market weak.
Lotte bought at least 22,500-27,500 tons for its Yeosu cracker, a day after YNCC bought up to 60,000 tons, both for H1-September delivery, at premiums of US$8-9/ton. The Asian naphtha crack has fallen 23% to US$146.13/ton on July 30 from multi-year highs of US$190.58 in mid-July following a supply crunch due to strong demand for the light fuel from the gasoline sector.