Naphtha glut in Asia to persist on higher Middle Eastern and Indian exports

28-Jul-16

Asia will receive about 900,000 tons of naphtha in August from the West, including from Europe and the Mediterranean, as per traders in Reuters. The quantity remains unchanged from July where the monthly volumes had already eased to its lowest since early 2013. However, oversupply in Asia is to persist as the supply loss from the West will be countered by higher Middle Eastern and Indian exports.

Traders said Abu Dhabi National Oil Co (ADNOC) had been offering spot cargoes in the market although it traditionally sells through one-year contracts. Exports from India for H1-2016 was up 68,000 tons a month to reach an average monthly of 603,000 tons compared with the same period in 2015. In contrast, the monthly average of Western naphtha arriving in Asia for January to June fell 100,000 tons to 1.52 mln tons compared with last year. Traders expect the naphtha market to stay weak all through the third quarter as not only will the glut persist, but there are scheduled maintenance at crackers in Taiwan next month, and in Japan and South Korea in September.