Asian naphtha prices rise, cracks surge on demand from West

01-Mar-11

Naphtha prices in Asia rose to a two-session high, while cracks surged about 15% to almost a month-high. As per Reuters, the increase has been supported by Western demand, on news that USA has purchased large volumes of naphtha from Europe about a week ago, impacting the Asian market. It is estimated that USA has locked in at least 300,000 tons of naphtha for late February to early March loading from Europe, leaving fewer Western barrels for Asia, which is short of naphtha. This has lifted sentiment in Asia, which was previously feeling the pressure of demand loss caused by upcoming heavy maintenance starting from next month. Supplies in Asia could be a little short in April in the absence of European barrels next month, as the effects of that will spill over to the following month. Open spec naphtha for front-month H1-April rose by over US$21 to US$975.50/ton, and cracks recovered over US$15 to US$124.10/ton premium.