Naphtha prices in Asia at 4-1/2 month low

15-May-12

Asia's naphtha price hovered around its lowest in 4-1/2 months on Monday at US$927.50/ton while intermonth premiums (the differential between H2-June and H2-July) were stable, as per Reuters. Sellers seem hopeful of some demand from South Korea for H2-June cargoes with the restart of Honam Petrochemicals’ 1 mln tpa cracker at Daesan after it was shut for about a week due to repair works, and restoration of run rates at Yeosu. However, the market ahead is expected to spiral down as supplies will likely increase against slower demand. Saudi Aramco has restarted a 225,000 bpd condensate splitter in early May following a 50-day maintenance and offered its first spot A310 naphtha cargo for May 24-25 loading from Ras Tanura aftera long absence. The maintenance had choked off around 250,000-330,000 tons of naphtha, which was one of the factors behind the tight supply situation in Asia. Demand will be majorly impcted when Formosa shuts its 700,000 tpa cracker for a 40-45 days' maintenance starting June 20, while CPC will permanently decommission a 230,000 tpa cracker around the end of this month.