Naphtha crack in Asia for H1-July dips to lowest front-month value since March 19

19-May-14

Asian naphtha crack for front-month H1-July was at US$129.7/ton, making this the lowest front-month value since March 19, as per Thomson Reuters. Buyers replacing a portion of their naphtha with cheaper liquefied petroleum gas (LPG) and prompt barrels from Saudi Arabia were weighing the market down, as per traders. Saudi Aramco has offered 55,000 tons for May 21-23 loading from Ras Tanura but it was unclear if the cargo was sold. Traders said there could be more cargoes offered on a prompt basis but this could not be confirmed. Naphtha coming from Europe to Asia in the months ahead could be higher as refiners complete their maintenance in Europe. Naphtha stocks independently held at Europe's Amsterdam-Rotterdam-Antwerp (ARA) hub were already hitting record high levels of 331,000 tons in the week to May 15, data from Dutch oil analyst Pieter Kulsen showed. But the high naphtha stocks could also be built in anticipation of higher demand from gasoline blenders. India's Reliance Industries has offered 55,000 tons of naphtha for June 8-12 loading, coming just days after it sold 75,000 tons for June 5-10 loading to Vitol at premiums in high US$40s/ton level to Middle East quotes on a free-on-board (FOB). Oil and Natural Gas Corp (ONGC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) had each offered a 35,000 ton and 50,000 ton cargo for June 17-18 loading from Mumbai and July 13-15 loading from New Mangalore respectively. The two tenders will close on May 21, with bids to stay valid until May 22.