Defying weak market fundamentals, Asia's naphtha margins stood at a week high on Monday, defying weak fundamentals, possibly propped by the lower flat price and hopes of China rolling out stimulus measures to combat an economic slowdown, as per Reuters. Open-spec naphtha stood at US $873/ton on Monday vs over US$1000 a month ago. Market could have found support from recent bearish news, including cuts in cracker run rates in South Korea and Thailand and possible cuts in Malaysia due to weak petrochemical margins, or hopes of monetary policy-easing moves in China.
Last week, the Chinese Premier voiced that government would step up policy fine-tuning to give more attention to supporting growth and existing government spending plans on key projects should be brought forward. This has fuelled expectations of China likely to hand out more stimulus measures.
In market happenings, Qatar's Tasweeq has not been able to close its term deals for plant condensate grade and full-range naphtha with buyers due to the wide buy-sell gap. India's MRPL sold a mid-June naphtha cargo to Mercuria at premiums of about US$21/ton above Middle East quotes on a free-on-board (FOB) basis. The premiums reflected a near 38% dive as compared to another June cargo sold to Statoil on May 14. BPCL sold to PetroChina two 35,000-ton cargoes, one of which is for June 29 to July 2 loading from Kochi and the other for June 28-30 loading from Mumbai at below US$20/ton premiums vs US$37/ton it had fetched for two previous deals.
29-May-12 
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