Naphtha prices and cracks fall in Asia on expectations of weaker demand for May

08-Mar-10

Naphtha prices and naphtha cracks dipped in Asia on expectations of weaker demand for May cargoes as compared with April. Buying interest for April parcels is expected to remain strong as Taiwan, South Korea and Japan’s till date spot naphtha purchases for April arrival have been 650,000 tons. Demand, however, is expected to soften in May when compared to April- Asia's largest naphtha buyer Formosa Petrochemical is likely to skip May purchases, due to roll-over of a minimum of 75,000 tons of naphtha shipment to May, due to ample stocks from its own refinery. This news has counterbalanced the supply tightness from ADNOC, which has deferred cargoes for Q2-10 due to a deficiency in its April 2010-March 2011 contract. Naphtha cracks have dipped by ten dollars to US$154.03/ton premium, lowest since Feb. 26. Indian Oil Corp has offered 30,500-31,500 tons of naphtha for March 20-22 lifting from Dahej, totaling this month’s exports to 150,000 ton. Reliance has offered 50,000-55,000 tons of March 26-31 loading, bringing its total exports for March to 200,000-205,000 tons.