Naphtha price in Asia extend losses, dip to near 7 week low

28-Jan-11

Asia's naphtha price extended losses and neared a 1-½ month low on Wednesday, while cracks remained at their lowest in nearly two weeks as sentiment continued to be weighed down by weaker European demand, as per Reuters. Europe supplies are long and arbitrage flows to the East is looking slightly better. Buying interest in the Far East has stayed healthy with South Korea's YNCC coming forward to buy 75,000 tons for H1-March arrival and Japanese Idemitsu’s purchase of 25,000 tons for the same delivery period. These came shortly after LG Chem, Honam and Taiwan's Formosa having bought a total of 225,000-250,000 tons for the same delivery period. Traders said YNCC will likely be supplied with pure open-spec grade with a minimum 65% paraffin content at a premium of US$4.50/ton to Japan spot quotes on a cost-and-freight (C&F) basis. This was because naphtha with a minimum 70% paraffin content, which YNCC had preferred, is not widely available. Idemitsu on the other hand paid US$7/ton premium to the same formula for the cargo. Gasoline cracks stayed at a two-month low despite a relatively well supported market. Taiwan's Formosa will slash runs at its 540,000 bpd refinery in March to about 56% of total capacity because of a planned maintenance. It will be shutting a 180,000 bpd CDU, an 84,000 bpd RFCC in March for 30-40 days.