Naphtha at 5-week high in Asia, prompt supply tightens

05-Jul-14

The Asian naphtha crack was at a fresh five-week high of US$152.63/ton on Thursday due to tighter prompt supplies against a steady stream of demand, as per traders in Reuters. Malaysia-based Titan was seeking naphtha for Aug. 21-25 arrival at Pasir Gudang but the results were not immediately clear. The purchase tender came just about a week after Titan had bought a cargo for Aug. 11-15 arrival at the same port at a premium of about $10 a tonne to Japan quotes on a cost-and-freight (C&F) basis. Taiwan's CPC is also expected to wrap up talks to buy full-range and heavy naphtha for August arrival at Kaohsiung. "Traders were likely not holding that many barrels as earlier expectations of a weak market ahead prompted them to be more cautious," said a Singapore-based source. He added the caution has resulted in a situation where traders now have limited prompt cargoes to supply despite the steady buying interest. The startup of two condensate splitters this month in South Korea, each owned by SK Energy and Samsung Total, had weighed sentiments. In addition to demand from the petrochemical sector, strong gasoline demand in Asia was also giving naphtha some support.