Asia's naphtha price ended at a two-session low on Wednesday but cracks hit a two-week high despite weak fundamentals, as per Reuters.
South Korea's LG Chem bought two medium-range naphtha cargoes for H2-July arrival, one to be delivered to Yeosu and another to Daesan at discount of US$2.50-3/ton to Japan spot quotes on a cost-and-freight (C&F) basis. On June 15, the South Korean major bought 50,000 tons of naphtha for the same arrival period, at a steeper discount of US$5/ton.
Sellers seemed unwilling to sell at last week's low prices- refusing to sell term cargoes to Honam and Samsung at discounts, prolonging the discussions. But fundamentally, traders said supplies were ample and that the strength in cracks seen in the last two sessions could be short-lived as a result. The strength in the Asian market was seen mirroring the strength in propane prices in the U.S. and stronger cracks in the West. Propane and butane, or liquefied petroleum gas (LPG), can partially substitute naphtha feedstock in Asia.
Price for front-month H1-August eased to US$929/ton, its lowest since Monday, while cracks rose by over four dollars to US$92.8/ton.
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