Asia to receive 1.5 mln tons of naphtha in March from West - lowest monthly volume arrivals

22-Feb-16

Asia is to receive no more than 1.5 mln tons of naphtha in March from the West including Europe, said five traders polled by Reuters, making this the lowest monthly volume arriving in the East since October. February arrivals are expected to be about 1.7 mln tons. While the reduced volume has lifted spot prices, a weak gasoline market and cracker maintenance in North Asia in March are capping price gains and preventing open-specification naphtha prices from rising too sharply, traders said. But cargoes arriving in H1-April in South Korea, Asia's top naphtha importer, were sold at about parity to Japan quotes on a cost-and-freight (C&F) basis versus discounts of US$2-6.50/ton for March cargoes. "The market was improving but it underwent a correction after traders factored in the cracker maintenance in Japan and South Korea," said a Singapore-based industry source. "Refinery maintenance is also taking place in March but we are not sure what the net demand/supply is right now." Japan's Tosoh is shutting its 527,000 tpa cracker in early March for a one month's long turnaround while South Korea's Yeochun Naphtha Cracking Centre will idle a 580,000 tpa cracker for a 30-day maintenance starting in mid-March. Naphtha demand will decline at least 200,000 tons in March because of the maintenance. Japan's Asahi will permanently shut a 504,000 tpa cracker in March. Japan is also closing down some of its crude distillation units over the next few years on weaker domestic demand.