Margin for Asian naphtha falls amid higher than expected volumes to arrive from the West

22-Mar-17

The margin for Asian naphtha fell on Monday as higher than expected volumes were expected to arrive in the region from the west, as per Reuters. One of the sources said 1.4 mln tons of naphtha was expected to arrive in April. Traders had anticipated 1 to 1.1 mln tons.

The volumes were fixed when the arbitrage made it profitable but that is no longer the case, the source added. “The volume for May so far is not high and I think some crackers are evaluating (the use) of more LPG from second half of May,” he added, referring to liquefied petroleum gas (LPG). Asia’s naphtha demand surged in late 2016 as petrochemical makers turned to the product after supplies of cheaper alternative LPG were consumed by heating demand amid cold regional weather. This trend appeared to be reversing, the source said. South Korea’s Hanwha Total entered the spot market seeking naphtha but the results of the deal could not immediately be confirmed. Kuwait Petroleum Corp likely sold 25,000 tons of naphtha for April 2 to 3 loading at a premium of $7-8/ton to Middle East quotes, traders said. India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) offered a naphtha cargo for April, traders added.