Asian naphtha rises on strong demand
SINGAPORE: Asian naphtha for the first half of June was $6 a tonne higher than the price for the first half of July on Tuesday, up from a $5 gap in the previous session as strong demand and expectations of reduced supplies widened the premium between the months.
Splitter outages in the Middle East were expected to hurt naphtha supplies, traders said without elaborating.
LG Chem was the first to buy naphtha in South Korea for first-half June arrival at Yeosu and Daesan through a tender at premiums between $5 and $6 a tonne to Japan quotes cost and freight (C&F).
Through tenders alone, South Korea has bought more than 700,000 tonnes of naphtha from the spot market for May delivery. South Korea imported an average of 1.6 million tonnes to 1.7 million tonnes of spot and term naphtha a month for January and February, official data showed.
Kuwait was looking to buy 25,000 tonnes of 91-octane gasoline for delivery May 4-6 in a tender closing April 19.
India’s Essar Oil, meanwhile, has offered 35,000 tonnes of naphtha for May 24-30 lifting from Vadinar in a tender closing April 20.
Asia’s gasoline crack climbed 3 percent to a two-week high of $11.20 a barrel, supported by demand amid the peak refinery maintenance season this month.
South Korea’s S-Oil Corp expects stronger gasoline demand for the US summer driving season to support refining margins in the second quarter, with heavy maintenance keeping supply and demand in balance.—Reuters
ANALYSISKarachi Shipping Intelligence