The Asian naphtha crack eased by US$2.57 a barrel from a 1-1/2 month high to US$140.23 on Wednesday but demand for December shipments continued to be seen strong as petrochemical makers were ready to pay high premiums in a tightly supplied market, as per Reuters.
Traders said petrochemical makers are enjoying lucrative margins in the downstream ethylene, propylene and monoethylene glycol sectors and most were willing to pay higher premiums to secure naphtha shipments. There are expectations for Formosa Petrochemical Corp to emerge later in the week for H2 December shipments after it raises operating rates at its 2.93 mln tpa naphtha cracking complex by 10 percentage points to 90%. Formosa is expected to be looking to buy for H2-December to increase runs at Nan Ya's MEG plant. Formosa has already locked in around 150,000 tons of H1-December cargoes at premiums of US$14-16/ton on a cost-and-freight (C&F) basis to Japan quotes.