Asian naphtha price and its margin each end the week at a month's high

13-May-13

Asian naphtha price and its margin each ended the week at a month's high of US$876.50/ton and US$97.33/ton, held up by demand and lower-than-expected western exports to Asia following Algeria's cancellation of some cargoes, as per Reuters. State-owned Sonatrach has cancelled around three naphtha cargoes of medium-range vessel size as it needed them for gasoline. This gave sellers support and raised the spot premiums in South Korea as the cancellation will affect the overall Western exports to Asia, said a North Asian trader. LG Chem had to pay more for two 25,000 ton naphtha cargoes it bought for H2-June arrival at Yeosu and Daesan at premiums of US$8/ton and US$8.50/ton respectively to Japan quotes on a cost-and-freight (C&F) basis. This reflected a 14 to 21% spike in premiums versus a recent H1-June purchase at US$7/ton. But traders added that it was premature to expect the market to continue firming as supplies are likely to linger at high levels as more refineries return from maintenance.