Asia is set to import about 1.6 mln tons of naphtha from the West in November, aggravating a glut that has already pummelled prices in the region, as per traders in Reuters. Projected naphtha shipments to Asia from Europe, USA and the Mediterranean, while lower than the record volume of 2 mln tons seen in September and the 1.8 mln tons in October, will still outpace demand by about 200,000 tons a month. The heavy inflows have already taken their toll on spot naphtha prices, with some deals being done at all-time low rates. Despite low prices, cargoes keep streaming towards the East because demand is bad in Europe on account of Shell's Netherland cracker shutdown.
Typically, sellers have the option of supplying up to 10% more or 10% less of naphtha contracted with a buyer, a condition which normally does not have any major market impact because Asia has been structurally short of naphtha. But the unusual glut, a result of high refinery runs and record high volumes of alternative feedstock liquefied petroleum gas (LPG) displacing naphtha this year, is prompting sellers to supply 10% more naphtha contracted to a buyer.
21-Oct-14 
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