Naphtha margin in Asia continues narrowing

21-Dec-12

The Asian naphtha margin continued narrowing to reach US$134.38/ton, the lowest since last Friday, as per Reuters. According to traders, the naphtha market may be slightly volatile ahead because buyers and sellers are unable to determine how many European and Mediterranean cargoes will come to Asia in February. Asia is structurally short of naphtha and is dependent on other regions for supplies. In general, traders agreed that Asian demand should remain firm and that the issue hinged more on supplies. YNCC was the first in South Korea to buy H1-February cargoes through a tender- about 100,000 tons of open-spec naphtha at premiums of about US$16/ton to Japan quotes on a cost-and-freight (C&F) basis, little changed from what it paid for cargoes on Dec. 12 for delivery in H2-January. Taiwan's CPC was seeking 105,000 tons of naphtha for February arrival in a tender closing on Dec. 26, with offers to stay valid until Dec. 27 – 75,000 tons of full-range naphtha and 30,000 tons heavy grade. Earlier Formosa Petrochemical bought 100,000-150,000 toes of open-spec naphtha for late January-early February arrival.