Naphtha continues to stays down in Asia

30-Jul-14

The recovery in the gasoline crack in Asia was not duplicated in the Asian naphtha sector, where the crack fell for the fourth straight session to US$158.7/ton as tight prompt supplies were expected to ease on possible slower demand, as per Reuters. Formosa Petrochemical is about to shut the largest of three naphtha crackers from Aug. 16 to end-September for a planned maintenance at its 2.93 mln tpa in Mailiao possibly leading to an erosion at least 350,000 tons of light fuel during the shutdown period. Buyers looking into maximising the amount of alternative liquefied petroleum gas (LPG) use in crackers in September could also be weighing on naphtha. But some traders reiterated that despite the fall, the current value at above US$150/ton still reflected a comparatively strong market as Indian exports were likely to stay at low levels of below 700,000 tons. Although Indian Oil Corp (IOC) has offered 35,000 to 40,000 tons of naphtha for Aug. 14-16 loading from Dahej, making this its first offer since it sold a cargo for January loading from the same port, its monthly average export volumes have fallen sharply. Between January and June 2013, IOC sold a monthly average of 107,000 tons, lifting from various ports, versus 40,000 tons during the same period this year, Reuters data showed.