Asia's naphtha crack rose to a 2-1/2 week high of US$60.55/ton on Monday as a glut was seen easing with fewer Western cargoes booked for Asia arrival, traders were reported to say by Reuters. Monthly Western cargoes arriving in Asia have declined every month since February following a record 2.2 mln tons arriving in January. Volumes arriving in May were seen capped at 1.4 mln tons. The number of cargoes arriving next month would be even lower as traders were rejecting Western cargoes in view of the supply overhang in Asia, which is structurally short of naphtha.
"The market is improving as there are less supplies for sure because of fewer cargoes arriving in June from the West," said a source based in Singapore. South Korea's LG Chem had to pay more as fundamentals improved for sellers. The petrochemical maker bought a naphtha cargo for second-half June arrival at Daesan at a discount of about US$4.2/ton to Japan quotes on a cost-and-freight (C&F) basis.
The discount was narrower than the US$5/ton LG Chem paid on May 11 for cargoes delivering to Daesan in second-half June. European trader Total bought 34,500 tons of naphtha from Oil and Natural Gas Corp (ONGC) for June 3-4 loading from Hazira. It bought another 20,000-25,000 tons of the fuel from Hindustan Petroleum Corp Ltd (HPCL) for May 25-27 loading from Vizag late last week. Both cargoes were reported done at low single-digit premiums to Middle East quotes on a free-on-board (FOB) basis. Gunvor on the other hand had bought up to 30,000 tons of naphtha from Indian Oil Corp (IOC) for June 4-6 loading, with price levels heard at a small discount to a small premium to IOC's formula on a FOB basis. Details of the deals above could not be immediately confirmed as sellers and buyers do not comment on their deals. The current price levels were a far cry from the start of the year when Indian cargoes for January loading were sold at premiums ranging from about US$15-22.50/ton.
18-May-16 
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