Asian naphtha crack dips to 2-1/2 month low amid a supply overhang

20-Jan-16

Asia's naphtha crack was down for the seventh straight session on Thursday, extending one of its longest losing streaks in over a year to hit near a 2-1/2 month low due to a supply overhang, as per Reuters. However, the weak market fundamentals tempted a second buyer to secure term cargoes this week, this time being South Korea's YNCC. The petrochemical maker was looking to lock in a total of 100,000 tons of naphtha for April 2016 to March 2017 delivery through a tender closing on January 18, with offers to stay valid until January 20, traders said. Earlier this week, Taiwan's CPC was looking for a total of 700,000 tons of naphtha for March to December delivery. This was also done through a tender. Asian sellers were grappling with ample supplies and some were prompted at the start of this week to sell their cargoes to South Korea at discounts for the first time since early November. A record volume of 2.2 mln tons of naphtha are scheduled for Asia arrival this month from Europe, US and the Mediterranean against an average monthly arrival in 2015 at 1.7 mln tons. Indonesia's Chandra Asri Petrochemical has shut its 860,000 tpa naphtha cracker following a minor glitch and is expected to resume operations in about a week's time or less, industry and trade sources said in Reuters.