12-Jan-17 Asia's naphtha crack rose for the sixth straight session on Tuesday to nearly 9-1/2 month high of US$93.4/ton supported by strong demand, as per Reuters. Taiwanese Formosa Petrochemical Corp, Asia's top naphtha importer, was looking to by naphtha for H2-February delivery to Mailiao through a tender closing on January 11.
South Korea's YNCC had bought around 75,000 tons of naphtha for H2-February delivery at premiums of at least US$1 to Japan quotes on a cost-and-freight (C&F) basis. Japan's Idemitsu had paid at least US$2/ton for naphtha scheduled for the same delivery period. Buyers have limited option but to rely on naphtha as alternative liquefied petroleum gas (LPG), used for heating, was not readily available, traders said.
European naphtha coming to Asia in February was also expected to be lower vs January where volumes were to reach 1.5 mln tons. These factors were behind spot prices in South Korea flipping to premium on January 6 for the first time since late November. Asia's gasoline on the other hand fell for the fourth straight session to reach an almost three-week low of US$9.76 a barrel to mirror the weaker fundamentals in the West.
There was a slowdown of gasoline moving to the United States from Europe. Europe and the US sporadically ship gasoline to Asia. A leak happened in a unit at Royal Dutch Shell's Bukom refinery-petrochemical site in Singapore on Monday, a company spokeswoman says on Tuesday. The affected unit had been shut for scheduled maintenance when the leak happened. South Korea's SK Energy will shut a gasoline-making unit in first-half of this year for maintenance but this could not be confirmed. KPIC, also a South Korean firm, will shut its only naphtha cracker from mid-April to either end May or early June for maintenance and expansion works, trade sources say. Capacity of the cracker will be raised to 800,000 tpa from the current 470,000 tpa.
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