Naphtha exports from Europe to Asia for May arrival to stay at around five month lows

07-Apr-14

Around 900,000 to 1 mln tons of European/Mediterranean naphtha are expected to arrive in Asia in May, similar to March volumes which were at five-month low,as per Reuters. The lower-than-average European volumes, as opposed to a record 1.7 mln tons for January arrival in Asia, are coming at a time when Asia needs more supplies from the west due to heavy refinery maintenance, traders added. "Asia needs about 1.4-1.5 mlon tons from the west for May arrival," said a Singapore-based trader. As it usually takes about 35 to 40 days for European cargoes to reach Asia, depending on which ports the cargoes are sailing from, traders still have time to fix cargoes for Asia arrival in late May. But Europe may not have that much spare capacity as it is also in its heavy refinery turnaround mode. Additionally, Europe likely prefers to divert whatever spare naphtha it has now into gasoline production or gasoline blending to meet motor fuel demand in the US, traders said. But the current strong market could take a hit after May. "The market is supported now but many of the refineries would have completed their maintenance in June. On top of this, there are new splitters coming up in South Korea and this will result in new naphtha supplies," said another trader. SK Energy is building a new 100,000 bpd condensate splitter due for completion by May while Samsung Total is expected to bring online a 145,000 bpd condensate splitter around July.