Two dollar spike in crude prices pulls down naphtha margins in Asia

Naphtha margins in Asia have taken a hit as crude prices jumped by over two dollars a barrel on Wednesday. Cracks for the H1-February fell by over 8 dollars to US $110.48/ton, as per Reuters. The dip is in line with a drastic fall in European naphtha cracks on Tuesday. "With flat price being much higher now, some sellers might be out to sell their balance cargoes in the market, so this could be affecting naphtha prices as well." However, demand from South Korea and Taiwan remained robust due to projected increase in demand for finished plastic products post Chinese New Year holidays in January. Traders are expecting an uptrend in Chinese plastic demand after the Lunar holiday. In Japan, naphtha imports for the petrochemical sector fell 26% in November from the same month a year ago. Asia's January swaps were reported US$15/ton higher than Northwest European prices. Price for front month open spec naphtha for H1-February rose to US$915/ton.
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