SINGAPORE: Asia’s naphtha inter-month spread held firm on Tuesday as demand and tighter supply persisted.

Front-month open-specification naphtha price for second-half May remained $13.75 a tonne higher than the following month for the third straight session after it hit its highest since March 31 on April 6.

Front-month prices are typically higher than the following months when fundamentals are strong.

South Korea’s LG Chem and Hanwha Total had in the previous session bought naphtha for second-half May delivery at premiums of about $12.50 and $15 a tonne to Japan quotes on a cost-and-freight (C&F) basis respectively.

Hanwha Total has raised its monthly average purchase of heavy full-range naphtha this year to some 250,000 tonnes versus an average of 150,000 tonnes a month in 2017.

Eyes were on Formosa, Asia’s top naphtha importer, as it was seeking naphtha for second-half May arrival at Mailiao through a tender due to be awarded on Wednesday. Formosa had in late March bought naphtha for first-half May arrival at premiums which were about $11 a tonne to its own price formula on a cost-and-freight basis, making that the highest premium it had paid since December.

Traders were expecting Formosa’s latest tender to be awarded at similar levels of around $11 or slightly below $11. India’s Hindustan Mittal Energy Ltd (HMEL) sold 15,000 tonnes of naphtha for April 23-25 loading from Mumbai to Vitol at premiums in the one-single digit level to Middle East quotes on a free-on-board (FOB) basis.—Reuters