Naphtha inter-month spreads surge to almost 9 month high on emerging demand from Formosa

19-Dec-12

Inter-month naphtha spreads in Asia surged to a near nine-and-a-half-month high in early trade on Tuesday, following overnight gains in Europe coupled with demand emerging from Asia's largest buyer, Formosa Petrochemical Corp, as per Reuters. European naphtha cracks were firmer because of recovering liquefied petroleum gas (LPG) prices, which in turn made naphtha a more attractive gasoline blendstock because of comparatively lower prices. The January/February inter-month premium has been well-supported since the end of November on expectations that cracker operators will ramp up utilization rates ahead of the Lunar New Year in February to meet growing demand for petrochemicals.