Naphtha crack in Asia dips to near 2 month lows

05-May-16

Naphtha crack in Asia slipped mid-week to a nearly two-month low of US$57.2/ton amid ample supplies as refineries ran at high rates to cash in on low crude prices, as per traders in Reuters. The weak fundamentals drew South Korean buyer YNCC forward as it sought to lock in low naphtha prices through a 12-month purchase contract starting July. South Korea's Lotte Chemical has bought at least 25,000 tons of naphtha at US$5/ton below Japan quotes on a cost-and-freight (C&F) basis, the first spot purchase tender for H2-June delivery, traders said. "There is a possibility that prices could go lower. Traders thought that prices could rebound for June cargoes but gasoline failed to support naphtha this time. "There has been a lot of increase in the supplies of light distillates and if this continues into Formosa's cracker turnaround season in August, we will trade at lower prices," said a Singapore-based trader.