YNCC buys H1-June arrival naphtha at larger discounts amid growing supply

29-Apr-16

South Korea's YNCC has bought naphtha for H1-June arrival at Yeosu at about US$3.25/ton below Japan quotes on a cost-and-freight (C&F) basis. This is the steepest discount in S Korea in a month, as per traders in Reuters. On Tuesday, LG Chem and Hanwha Total had bought a total of 100,000 tones of the fuel for H1-June delivery at a narrower discount of US$1-1.50/ton to Japan quotes on a C&F basis. Spot prices turned positive for the first time in end March since late December following reduced western cargoes coming to Asia in April and May. But high refinery runs in Asia despite refinery maintenance quickly countered the lower volumes of western cargoes and flipped the premium back to discount last week. "There are a lot of cargoes in the market. Sellers are concerned about second-half June too," said a trader in Reuters.