Naphtha crack in Asia at highest since Jan 10

23-Jan-13

Asian naphtha prices and margins extended gains to US$974/ton and US$134.90/ton respectively, the highest since Jan. 10, supported by concerns of low Indian supplies versus strong demand, as per Reuters. Malaysia's Lotte Chemical Titan returned to the market with a new purchase tender, this time for volumes scheduled for March 1-6 arrival at Pasir Gudang. It may have succeeded in securing one cargo for March arrival, with premiums heard around US$9/ton to Japan quotes on a cost-and-freight (C&F) basis. This is tagged to a 45-day pricing formula instead of the usual 30 days. Traders added that Titan may be seeking more as it had to cancel an earlier tender to buy a H2-February cargo due to no offers. Its parent company Lotte Chemical in South Korea may not have fully completed talks to buy naphtha for March 2013 to February 2014 delivery. India has been hit by a string of issues recently, starting off with a fire at Reliance Industries late last month. That has been resolved but it is expected to shut a crude unit next month for maintenance. On the other hand, Indian Oil Corp (IOC) has limited spot naphtha barrels for export following a fire at its storage terminal in Hazira while MRPL has to delay two cargoes due to lower production. Reliance has sold 55,000 tons of open-spec naphtha to Itochu for H2-February loading from Sikka at about US$42.50/ton above Middle East quotes on a free-on-board (FOB) basis. Thai refiner IRPC sold 30,000 to 45,000 tons of heavy naphtha for H2-February loading from Rayong at a premium of about US$30/ton to Japan quotes on a FOB basis. It had skipped exporting spot naphtha for December and January loading. Essar came out with an offer for 35,000 tons for Feb.20-24 loading from Vadinar.