Two more cargoes of 12,500 tons of naphtha have been purchased by trading company Vitol, taking its total February purchases to 150,000 tons, the largest monthly volume bought by an individual company during the Platts Market on Close assessment process since 2005, as per Platts. The current buying by Vitol is the biggest of its kind since Petroplus booked 24 cargoes in March 2005. Since February 1, Vitol has booked eleven 12,500 mt CIF NWE naphtha cargoes for February delivery dates. 8 out of the 12 cargoes have been bought for 20-24 February delivery dates, with Vitol confirming intention to discharge at least some of the oil into an LR2 vessel carrying 75,000 tons to Asia. Vitol has an additional LR2 vessel booked to ship naphtha to Asia for February 26-29 delivery dates in order to fulfill contractual obligations in Asia.
Dow has sold three cargoes to Vitol for February 20-24 delivery dates, while BASF has sold one cargo to Vitol for the same period. Vitol's strong buying has meant that petrochemical companies have been selling naphtha to the trading firm rather than keeping the material in their own petrochemical systems.
Steepening of the backwardation in the market has been a result of this robust, along with a surge in the outright price of naphtha, which has continued to eat into petrochemical margins.
Platts assessed CIF Northwest European naphtha cargoes at US$1018.50/mt on Friday, the highest level since May 4.