The Asian naphtha price spread between H1-July and H1-August cargoes narrowed to US$14/ton, the lowest level since March 20, as per Reuters data. Demand for naphtha may be lower as liquefied petroleum gas (LPG) has become cheap enough to displace the light oil distillate as an alternative feedstock for petrochemical plants, traders said.
Relatively weak prices of downstream products have also led petrochemical producers, particularly aromatic plants, to reduce their run rates, trimming their requirements for heavier naphtha, a Singapore-based trader said. The supply of naphtha from the West into Asia also could rise in coming weeks as refiners in Europe complete maintenance.
South Korean LG Chem sought open-spec naphtha on Monday for delivery over H2-June into Daesan. While the results of the tender award could not be immediately confirmed, a trader said the petrochemical producer was heard to have bought as much as 50,000 tons of naphtha at a premium of around US$18/ton to spot Japanese quotes. That premium would be 14% lower than LG Chem's last purchase of a cargo with similar specification for delivery over H2 June into Daesan at US$21/ton.
21-May-14 
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