Asian naphtha margins were at a three-session low of US$85.7/ton respectively, weighed down by ample supplies, as per Reuters. Sellers were unmoved despite buyers coming forward to lock in H1-June naphtha cargoes as concerns over high east-bound shipments from the west offset the spot purchases.
Taiwan's Formosa Petrochemical Corp, South Korea's Lotte Chemical and Samsung Total Petrochemicals had on Monday and Tuesday bought a total of at least 100,000 tons of naphtha for H1-June delivery. But Asia's top naphtha buyer Formosa having bought just 50,000 tons made this its smallest single purchase this year so far. Despite receiving several offers, Formosa bought just one cargo of long-range vessel size. As per a Singapore-based trader, "Taking into account the petrochemical margins now, feedstock costs look too high. East is over-valued." Formosa's lower demand was a result of it replacing some of its naphtha feedstock with cheaper liquefied petroleum gas and its 2.93 mln tpa cracking complex operating at 90% of its capacity since the start of April due to soft petrochemical demand.