USGC naphtha slumps to lowest level since end of 2008, fuels interest in Asia

14-Jan-16

The outright price for US Gulf Coast naphtha barges slid on Tuesday to a low not seen since late 2008 on refiner selling in a move that points to interest in shipments of the refinery workhorse to Asian customers, as per Platts. Platts assessed naphtha 4.73 cents lower day on day at 92.08 cents/gal on the back of a BP offer to deliver the product January 20-22 in Houston that found no buyer. The offer was for naphtha at an initial boiling point of 110 degrees and maximum 63 API, known in the industry as the Platts standard specification. The differential was down 2.65 cents compared with Monday's assessment, with weakness in the underlying gasoline contract accounting for the rest of the fall in the outright price. The spot price for naphtha hit a low not seen since an assessment at 79.03 cents/gal on December 30, 2008, during the global financial crisis. The outright price had fallen for seven consecutive trading days through Tuesday and is more than 40 cents below the assessment six months ago at $1.3244 on July 13, 2015. Meanwhile, according to shipping market sources, there has been ongoing interest to move naphtha from the US to Asia amid the fall in prices on the Gulf Coast. "It seems like the naphtha arbitrage may be open, and that's adding some cargoes up to [January 25]," said a source.