Asian buyers restrained in anticipation of lower prices as naphtha crack dips to over 5 month lows

13-Jul-15

Amid abundant supplies, naphtha crack in Asia slumped to its lowest in about 5-1/2 months at US$63.18/ton. This has led some buyers to hold back in anticipation of lower prices, as per traders in Reuters. Sellers fought over buyers by offering to release their cargoes at steep discounts. Malaysia-based Titan was heard to have bought a naphtha cargo on Wednesday for H2-August delivery at a double-digit discount to Japan quotes on a cost-and-freight (C&F) basis. This is a sharp decline from levels seen 1-1/2 months ago, when the Malaysian company bought a H1-July cargo at flat. South Korea's Hanwha (previously known as Samsung Total), bought a H2-August naphtha cargo at a single-digit discount to Japan quotes on a C&F basis, the lowest price it has paid since January. "The market has fallen too much and it could see some technical correction from next week. Petrochemical margins are still doing well and that should give the market some support," said a Singapore-based industry source.