Naphtha crack in Asia rebounds from 17 month low to its highest in two sessions

10-Jun-16

Naphtha crack in Asia rebounded from a 17 month low to touch its highest in two sessions at US$44.2/ton, but was still far below this year's high at over US$145 as heavy supplies put pressure on the market. This has been clearly reflected in spot prices for cargoes on a cost-and-freight (C&F) basis, which have been at discounts since late April, as per Reuters.

South Korea's YNCC has bought around 75,000 tons of naphtha for H2-July arrival at Yeosu at a discount of about US$4.75/ton to Japan quotes on a cost-and-freight (C&F) basis, traders said. This could not be confirmed. The current discount was slightly narrower than the US$5/ton YNCC paid on May 17, also for naphtha scheduled for H2-July. Traders said prices were expected to remain negative for at least a few more months. Traders expect cargoes of more than 1 mln tons in July and said for the market to start to recover cargoes in August would have to be less than 1.2 mln tons. So far, more than 700,000 tons of naphtha have been provisionally booked for July arrival from the West, and those volumes are set to increase as traders still have time to fix shipments. Separately, Hanwha Total has bought a cargo for H2-July arrival at Daesan but the price was not immediately known.