Lowest volume of Western naphtha to arrive in Asia since November 2013

16-Jun-14

About 1 mln tons of naphtha from Europe and the Mediterranean is expected to arrive in Asia in July, the lowest volume seen hitting the eastern shores since November 2013, as per traders in Reuters. But the lower quantities are not expected to bolster sellers' confidence as the market awaits three new condensate splitters coming online from July which will raise overall naphtha supplies in Asia. South Korea's Samsung Total and SK Energy are each starting up a 140,000 bpd condensate splitter. "SK Energy is waiting for approval to conduct a test-run in July," said an official, adding that the condensate splitter is starting up as planned. Singapore-based Jurong Aromatics had started trial runs at its 100,000 bpd condensate splitter about two months ago but traders said the unit may not be commercially ready. This, however, could not be confirmed. Although naphtha crackers are mostly running at high rates in Asia, and the volume of alternative liquefied petroleum gas (LPG) used by the petrochemical makers is expected to remain around 300,000 tons in July versus June, this had failed to lift sentiment. Indian barrels are seen higher and this could continue, while Europe will still need a place to release its excess naphtha going forward unless there are refinery run cuts, traders said in Reuters. "Most of the Indian refineries have completed their maintenance. Indian exports for July should be as high as in June," said a Singapore-based source. India sold close to 680,000 tons of naphtha for June lifting from various ports, the highest volume sold in a single month this year. This was also marginally higher than the 2013 monthly average of 660,000 tons. "Strong demand for gasoline in West Africa was previously helping to curb European naphtha exports to Asia, but that demand has came off. We could see more cargoes coming to Asia," said a third trader.