Naphtha crack sinks to US$66.5/ton - the lowest since Dec. 21 2016

03-Mar-17

Asia's naphtha crack dived for the second straight day on Thursday to sink to US$66.50/ton -the lowest since Dec. 21 2016, as gasoline weakness in the West and falling alternative liquefied petroleum gas (LPG) prices weighed on the market, traders said in Reuters.

Ethylene makers in Asia have not been able to replace naphtha with LPG, a commodity used for heating, in the last few months due to high prices caused by winter demand. But butane prices have fallen sharply recently and it could come back into the cracking pool in May or even earlier, traders said. Although premiums for Indian naphtha spot cargoes held above $10, traders said it may not be sustainable given the overall weakness of the light ends market. "Light ends as a whole is down. I don't think the premiums for Indian cargoes are sustainable and they will see a downward revision," said a Singapore-based source.