Naphtha crack in Asia slips, still 86% higher than crack value a year ago

24-Jul-14

Naphtha crack in Asia slipped marginally on Wednesday to a two-session low of US$169.9/ton. Levels however, are still at an 86% spike versus the crack value a year ago as expectations of supplies staying tight helped keep sentiment comparatively firm, as per Reuters. Although most buyers have yet to purchase naphtha for H1-September delivery, traders said the rising freight rates for tankers due to a supply crunch may discourage long-haul voyage fixtures. Freight rates have risen at least US$200,000 for tankers moving to Asia from Europe to around US$2.3-2.4 mln compared to two weeks ago. A trade source said that some tankers could be in the US Gulf coast area and that there were limited clean tankers left for traders to lift naphtha from Middle East and India, not just from Europe. This added to the supply woes from India which was recently hit by a string of refinery outages and maintenance.