Negative physical timespreads continue in Asia on cracker outages and high spot supply expectations

Asia's physical timespreads remained negative after nearly a month as cracker outages and expectations of high spot supplies weighed on prices, as per Reuters. South Korea's Samsung Total Petrochemicals picked up an additional spot naphtha cargo for H1-August arrival at a discount of US$3/ton to Japan spot quotes on a cost-and-freight basis. This was similar to levels it paid for two other cargoes for the same period arrival last week. LG Chem had partially shut a 900,000 tpa naphtha cracker in Daesan to change a component for an estimated three to four days following compressor problems and may need a few more days to stabilise after it resumes production. Currently, naphtha is estimated to be bottoming out, but petrochemical margins are poor and it is hard to determine the ethylene stock levels. Taiwan's CPC has shut a 380,000 tpa No. 4 naphtha unit on Monday for about two weeks- This outage is estimated to add to the ethylene supply disruption as well as feedstock naphtha demand loss. Also, CPC will maintain its original schedule to shut down the 500,000 tpa No. 5 cracker for a planned 40-45 days' maintenance starting in mid-August. The price for front-month H2-August spot naphtha extended gains of US$5.50 to US$926/ton.
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