Naphtha prices in Asia end the week at a near 4 month low

Asia's naphtha price ended the week at near four-month lows, dragged down by Brent crude, while high supplies kept cracks at weak levels below US$100/ton since June 7, as per Reuters. But this may not shut out Western naphtha. As indicated by provisional bookings on shipping reports, Asia may receive at least 100,000 tons in July. This will add pressure to a market that is already weak as a cracker outage at Formosa pares demand. India is expected to keep its July exports at high levels of around 920,000 tons, similar to volumes seen for June loading. The Western barrels could be sailing in from Russia, Algeria and the United States. Since the U.S. West Coast gasoline market is not doing well currently, majors are exploring to reduce gasoline output and ship the heavy naphtha to Asia instead. Heavy naphtha is usually reformed into gasoline, if demand for the motor fuel is strong. The price for front-month first-half August fell to US$924/ton, lowest since Feb. 23. Naphtha cracks slipped to US$86.10/ton after a surge of over US$15/ton in the previous session.
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