Naptha margins rise in Asia amid increasing demand for January shipments

Asia naphtha margins rose by US$11.97 per barrel to a two-session high of US$130.10 amid increasing demand for January shipments, as per Reuters. The inter-month premium also firmed by US$1.50/ton to US$15, the highest since Nov. 19. Malaysia's Titan Petrochemicals bought 50,000 tons of H2 January shipments from Shell at a premium of US$11 to Japan quotes on a cost-and-freight (C&F) basis, marginally higher than its last purchase of 50,000 tons of H1-January shipments at a premium of US$10/ton. Naphtha cash premiums have rebounded this week after end-users emerged for more January shipments, but petrochemical margins had limited gains, traders said. South Korea's Honam Petrochemicals bought 55,000 tons of H1-January shipments at premiums of US$12.00-12.75/ton to Japan quotes on a C&F basis on Dec. 5. A trader notes that the market is bad, and ethylene margins have already slipped into negative last week. Some cracker operators have already implemented reductions in utilisation rates for December. These include South Korea's YNCC, Indonesia's Chandra Asri and Taiwan's Formosa Petrochemical Corp. In term talks, negotiations between Abu Dhabi National Oil Co (ADNOC) and its customers were at a standstill. ADNOC maintained its initial offer for splitter-grade naphtha at a premium of US$32/ton to Middle East quotes, while counter-bids stood at a premium of US$28/ton. Traders are expecting a conclusion to be reached by Dec. 7. Saudi Aramco has offered its term A310 cargoes at a premium of US$36/ton, its A180 cargoes at a premium of US$31/ton.
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