Asia's naphtha front-month, H2-December price was US$5.50/ton higher than the following month, making this the highest backwardation since June 15, as per Reuters. Backwardation reflects a strong market where contango reveals a weak market. Contango describes a market where front-month prices fall below the following month.
Demand has remained brisk, the Malaysia's based Titan seeking naphtha for December 16-25 arrival at Pasir Gudang through a tender closing on November 13. The petrochemical maker has been regularly buying naphtha, with the most recent purchase made on a cargo scheduled for first-half December arrival at a low single-digit discount to Japan quotes on a cost-and-freight (C&F) basis.
This came a day after South Korea's KPIC and Lotte Chemical have each bought naphtha for second-half December delivery. Traders said KPIC had paid about US$2/ton premium to Japan quotes on a C&F basis while Lotte forked out flat to US$1/ton premium. Formosa, Asia's top naphtha importer, has also wrapped up purchases for December cargoes. It bought about 100,000 tons for H2-December arrival at Mailiao at a low single-digit discount.
16-Nov-15 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}