Ample supply brings down Asian naphtha price differential between H2-October and H2-November

15-Sep-14

Amid persistent ample supplies, price differential between H2-October and H2-November for Asian naphtha was at a discount of US$3.50/ton at the end of the previous week. With this, open-spec benchmark price was at a discount for a fourth straight session, as per Reuters. "The market is going from bad to worse as the glut persisted," said a Singapore-based trader. A South Korean end user has bought a first-half November naphtha cargo through private negotiations at a discount of US$4-5/ton to Japan quotes on a cost-and-freight (C&F) basis, traders said. The last time prices were seen this low in South Korea was in 2011 when LG Chem bought a cargo for H2-July arrival at a discount of US$5 through an open tender, Reuters data showed. Indian premiums similarly fell to 2011 levels. Mangalore Refinery and Petrochemicals Ltd (MRPL) sold 50,000 tons of naphtha midweek, to oil major Shell for October 28-30 loading from New Mangalore at a premium of about US$11/ton to Middle East quotes on a free-on-board (FOB) basis. Indian Oil Corp (IOC) sold 35,000 tons for September 24-25 loading from Chennai to Vitol at a premium of about US$4/ton to IOC's price formula on a FOB basis. Kuwait was heard to have sold naphtha for October 10-15 loading to BP at a premium of US$6-7/ton to Middle East quotes on a FOB basis but this could not be directly verified.