South Korean demand boosts naphtha spread in Asia

Naphtha prices in Asia dropped to a one-week low at US$945 per ton but the inter-month premium was firmer at US$13.50/ton after demand emerged from South Korea for more H1-January shipments, as per Reuters. The inter-month premium is the difference between H2-January and H2-February prices. South Korea's Honam Petrochemical bought around 55,000 tons of H1-January shipments at premiums around US$12-12.75/ton to Japan quotes on a cost-and-freight (C&F) basis for delivery into Daesan where it runs a one million tpa cracker. The deal was the highest since Nov. 21 when the company bought H2-December shipments at premiums of around US$15-16/ton to Japan quotes on a C&F basis. Traders attributed the higher premium to firming derivative inter-month premiums and that the cargo has relatively prompt delivery dates. Rival petrochemical maker YNCC had bought around 75,000 tons of H1-January deliveries at a premium of US$8.50-9/ton to Japan quotes on a C&F basis on Nov. 30. In India, Oil and Natural Gas Corp (ONGC) sold a 35,000-tonne for Dec. 21-22 loading from Hazira to Unipec at a premium of US$32/ton to Middle East quotes. The transacted premium is marginally higher than a Dec. 10-11 loading shipment the company sold at a premium of US$31/ton to Middle East quotes.
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