23-Nov-16 Naphtha crack in Asia for H1-January was at a four-session low of US$79.7/ton, as higher Brent crude prices weighed on the market, as per Reuters.
South Korea's LG Chem emerged to buy naphtha from the spot market for H1-January delivery at a premium of US$2/ton to Japan quotes on a cost-and-freight (C&F) basis. Traders added that the petrochemical maker could have bought two cargoes of the fuel, but this could not be confirmed as buyers and sellers do not comment on their deals. LG Chem paid parity to a premium of US$1/ton on Nov. 2 for naphtha scheduled for H2-December delivery. KPIC sealed a US$492 mln (on Japan quotes on a C&F basis ) one-year naphtha contract with seller S-Oil Corp for a total of 11 mln barrels of the fuel, as per a statement from the refiner.
"There should be more naphtha in the market next year," said a Singapore-based trader. Increased capacities from new condensate splitters and crude distillation units would add to current supplies.
Although European cargoes arriving in Asia are expected to be higher in December vs November's quantities at below 800,000 tons, cargoes next month look set to stay below the monthly average of 2015 at 1.7 mln tons. This has raised premiums for Indian sellers, with Mangalore Refinery Petrochemicals Ltd (MRPL) fetching around US$12.65/ton to Middle East quotes for cargo sold to Trafigura for December 15-17 loading from New Mangalore. Reliance Industries has sold a naphtha cargo for December 10-12 loading at premiums of US$14-15/ton to Middle East quotes on a FOB basis. The spot deals could not be directly confirmed as sellers and buyers do not comment on their deals. Reliance sold a naphtha cargo about 1-1/2 weeks ago for early December loading at low teen levels to Middle East quotes on a FOB basis.
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