Provisional booking of 55% added arrivals since July of naphtha from the West for Asia

10-Jul-09

Additional naphtha from the West could help to ease the tight supplies in Asia where petrochemical demand is strong. Asia is faced with reduced run rates as refineries in Japan and South Korea struggle with weak middle distillates demand. About 55% more than July arrivals of naphtha, amounting to 500,000 tons has been provisionally booked from the West to land in Asia next month, since an increased number of vessels which were storing diesel are being freed up. But several players opine that all the bookings may not ensue. High freight rates caused by limited vessels had restricted Europe-Asia naphtha trades. Traders were storing diesel on vessels to cash in on the prevailing contango market structure, but some of these contracts have expired, freeing up Long-Range (LR) tankers which are needed to ship naphtha.