Asia's naphtha crack slipped to US$81 after a 30% spike in the previous session

22-Jul-15

Asia's naphtha crack slipped 4% to US$81.13/ton on Tuesday after a 30% spike in the previous session, as per Reuters. Traders looked past the marginal fall in value and focused instead on possibly fewer European and Mediterranean cargoes arriving in the East in September as high freight rates hamper the west-to-east trades. "The cracks are down by a bit but it is still a strong value compared to last week," said a Singapore-based trader. "Spot prices are still in discount but that has narrowed slightly." South Korea's YNCC bought two naphtha cargoes totalling around 50,000 tons for H1-September arrival at Yeosu at a discount of about US$3-4/ton to Japan quotes on a cost-and-freight (C&F) basis, traders said. This reflected a slight improvement compared to an average of US$5/ton discount to Japan quotes on a C&F basis last week. Concerns over freight rates for long-range vessels mounted as traders said they expected the impact to spread to freight rates related to medium-range tankers, which are largely used to transport naphtha within Asia. In China, naphtha imports at 655,169 tons for June were at a new high, surpassing a previous record of nearly 560,000 tons in October 2014, official data showed. The bulk of the imports, or about 32% of the total volume, were from Russia. China only became a net importer of naphtha in 2009