Market in Asia had turned bearish since last week after a bull-run which started at the beginning of 2012. Naphtha price and margins in Asia rebounded from a 4 month low to hit a three-session high at US$101.73/ton, on Tuesday, as per Reuters. Current conditions make it difficult to determine where the clear fundamentals are. Indian and the Middle Eastern sellers are holding back ahead of a term negotiation next week. ADNOC is to meet its Asian buyers next week in Singapore to renew prices for supplies for a 12-month period starting July
2012. Interestingly, buyers are also holding back purchases as they seem convinced there would more supplies with Europe likely to send more cargoes to Asia as naphtha demand in the West fell. Cheaper gas feedstock is causing both European and Asian crackers to replace some of their naphtha feedstock with gas. Additionally naphtha exports volumes are expected to gradually resume from India with MRPL restarting two of three crude units at its 300,000 bpd plant which were shut following water supply shortages and led to India's exports for May to dip to low levels below 600,000 tons.