Naphtha price in Asia was at a month's low of US$944/ton on Monday, while margin hit a 1-1/2 month low of US$112.55/ton on renewed concerns over high supplies and liquefied petroleum gas (LPG) prices falling quicker than naphtha, as per Reuters.
LPG is an alternative feedstock to naphtha. For most of 2012, LPG (namely propane and butane) prices were kept high on the back of tight supplies because of the sanctions against Iran. This forced European and Asian petrochemical makers to be solely dependent on naphtha.
Sellers' mood remained somber despite Asia's top naphtha buyer Formosa Petrochemical Corp was in the market buying spot naphtha through a tender. The tender is expected to be officially awarded on Tuesday. Traders estimated that Asia's top naphtha buyer may likely need about 100,000 tons of naphtha for H2-February arrival at Mailiao.
India's BPCL sold to Glencore 12,000 tonnes of naphtha, suitable for blending with gasoline, at a steep premium of US$41-43/ton to Middle East quotes on free-on-board (FOB) basis. The cargo is scheduled for Jan. 27-31 loading from Haldia.
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