Naphtha cracks in Asia at their highest in almost 15 weeks

11-Jan-12

Asia's naphtha cracks hovered at their highest level in around 3-1/2 months as tight supplies amid healthy demand further boosted sentiment, as per Reuters. A latest private deal was concluded by India's Reliance for an estimated 55,000 tons of naphtha for Feb. 5-10 lifting at premiums of US$27-28/ton to Middle East quotes on a free-on-board (FOB) basis. The 35-40% hike in its sales premium as compared to a cargo it sold to Shell earlier for Jan. 5-10 lifting at about US$20, reflects a sellers' market. South Korea's LG Chem also concluded deals for H2 February cargoes at higher premiums. Two 25,000 ton cargoes to be delivered to Yeosu and Daesan, were bought at premiums of around US$8.50/ton to Japan quotes on a cost-and-freight basis. This came a day after YNCC bought 75,000 tons for the same arrival period at Yeosu at premiums of about US$7.50/ton. Despite the strong fundamentals, Asia was not able to draw in more Western cargoes, as Europe is also tight on supplies coupled with firm freight rates. The price for front-month H2 February open spec naphtha edged up to US$974.50/ton.