Naphtha prices in Asia end week at 9 session high, margins at a month high

30-Jun-12

Asia's naphtha price ended the week at a nine-session high while margins stayed at a month high, supported by lower supply and improved petrochemical margins, as per Reuters. Open-spec naphtha price for front-month H1-August was at US$751 while margins were at US$53.50/ton premium, highest since May 31. India's naphtha exports for July lifting were at 720,000 tons- about 12% lower than what it sold for June loadings. The lower exports can be attributed to refinery maintenance and strong domestic gasoline demand. However, the Asian market has not been too impacted by reduced exports from India, as the supply lost from India can be offset by the Middle Eastern high spot exports. The market has been largely impacted by the scenario in Europe, Formosa coming back, improved petrochemical margins and liquefied petroleum gas (LPG) becoming more expensive. While the market has improved and is likely to continue to stay firm in the short-term, naphtha spot prices are unlikely to return to peak levels seen in March where India's naphtha cargoes for March lifting were selling at an average of US$42.