YNCC pays double premium for H2 August naphtha vs H1 August cargoes

15-Jul-14

South Korea's YNCC has bought naphtha for H2-August delivery at about US$15-16/ton above Japan quotes on a cost-and-freight (C&F) basis. Thus is almost double of what it paid for H1-August cargoes, as per traders in Reuters. YNCC bought three cargoes totalling 67,500 to 90,000 tons, and the current premium was the highest seen in the South Korean market since May 28 when LG Chem bought a H1-July cargo at US$18/ton premium. Naphtha sentiment has been steadily growing stronger since early July as supplies for August delivery were squeezed due to gasoline's peak demand season. Petrochemical makers were also buying up naphtha as crackers in Asia were mostly running in maximum mode. Asia's top naphtha importer Formosa Petrochemical had bought another 100,000 tons of naphtha, bringing its total purchases for August to 200,000 tons despite a scheduled maintenance at the largest of its three crackers at its 2.93 mln tpa Mailiao plant, traders said. It paid about US$11-12/ton for H2-August cargoes versus US$8-8.70/ton paid for H1-August cargoes.