Naphtha prices in Asia are at a two-week low on Thursday, while cracks edged higher. This was coupled with news that South Korean spot prices flipped to premiums for the first time in about two months, supported by recovering ethylene and plastics prices, as Reuters.
LG Chem bought two open-spec cargoes totalling around 50,000 tons for H2-September arrival at Daesan and Yeosu, at a per ton premium of 50 cents to one dollar to Japan spot quotes on a cost-and-freight (C&F) basis. This is the first time spot prices were in premiums since May 26. The prolonged shutdown at Formosa's 700,000 tpa No. 1 cracker and an upcoming maintenance at its 1.2 mln tpa No. 3 cracker are creating a tighter ethylene market. This has benefited the naphtha market as other petrochemical producers could be trying to fill the ethylene supply void by raising cracker run. Sellers were seen unwilling to release cargoes, with less than five offers heard quoted to LG Chem.
However, prices for H1-September were still at a discount, with Malaysia's Titan having paid around minus US$2.50/ton to Japan quotes on a C&F basis for 25,000-30,000 tons of full-range naphtha for Sept. 6-10 arrival. Japan's Idemitsu Kosan bought Essar Oil's 35,000 tons naphtha for Aug. 26-30 loading from Vadinar in a rare move. It usually buys from traders on a C&F basis. Idemitsu may be looking to co-load Essar's cargo with a term BPCL August lot it had bought in late April to maximise freight charges.
The price for front-month open spec naphtha for H2-September fell by US$16.50 to US$967.50/ton.
05-Aug-11 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}