Asian naphtha prices continue at 32 month high amid high Brent crude, cracks ease

12-Apr-11

Asian naphtha prices continued at a 32 month high in line with high Brent crude prices, with cracks easing slightly, as per Reuters. However, the intermonth spread remained firm on strong sentiment. Prices in Asia, which is structurally short of naphtha, have often been higher than in Northwest Europe. But Asian prices fell below that of Europe for the first time in around five and a half months on April 1. Despite healthy demand in Asia, some cargoes are Westbound. Egypt sold 25,000 tonnes of light naphtha for April 17-19 loading from Suez to Noble at about US$6/ton above Middle East quotes on a free-on-board basis, and the cargo is likely to go West. The Middle East will export around 150,000 tons of naphtha to Europe and the United States instead of to Asia. Despite a recovery in Asian prices above European prices, the differential between the two regions is not as wide as seen in January. Malaysia's Titan is seeking H2-May volumes of up to 50,000 tons in a tender due to be awarded on Tuesday. Price for front-month H2-May gained US$4.50 to US$1063.50/ton, its highest since Aug. 4 2008 at US$1070/ton. Naphtha cracks fell US$6.61 to US$119.78/ton premium.