Naphtha cracks in Asia recover from three week lows on healthy demand

Asia's naphtha margins rebounded from a three-week low to reach a three-session high on Tuesday at US$149.30/ton, while intermonth premiums stayed firm as healthy demand persisted amid tight supplies, as per Reuters. Premiums are likely to stay supported for sometime as tight supplies have not completely eased. South Korea's LG Chem paid premiums of US$20.5-21.5 for 75,000 tons of naphtha for H1-June arrival at Yeosu and Daesan to Japan quotes on a cost-and-freight (C&F) basis. A day earlier, Honam paid a premium of US$20.50/ton for about 25,000 tons of naphtha for H1-June arrival at Daesan port. Asia has been plagued by tight supplies since early 2012 due to refinery maintenance in India and the Middle East. The situation was expected to ease this as maintenance at Reliance Industries was completed and Saudi Aramco was to restart a condensate splitter in early May. However, the region has been plagued by fresh outages. MRPL has not restarted a 300,000 bpd plant following a complete shutdown due to water shortage. Additionally, IOC cancelled a tender to sell up to 40,000 tons of naphtha last Friday originally meant for May 13-15 loading from Dahej, making this the second cancellation of offers in about a week.
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