Asian naphtha flips back to premium
20 March 2008 04:26 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian naphtha discounts flipped back to premiums for May delivery with a cargo trading at a $0.50/tonne premium on firming margins from downstream products such as propylene and butadiene, industry sources said on Thursday.
A mid-week deal saw a cargo being traded at a premium of around $0.50/tonne to
Korean end-users had earlier bought some open spec naphtha cargoes at around flat-to-$1/tonne discount to
Taiwanese end-users snapped up a cargo late last week at a slight discount to
Premiums were expected to be higher as the inter-month backwardation had widened to around $5/tonne from $1.50/tonne early week, traders said.
Firming demand for naphtha was due to end-users resuming operations at their crackers after turnarounds, sources said.
Additionally, a delay in the arrival of arbitrage cargoes, which were slated to reach sometime end-March to April, had caused some tightness in the prompt spot market with some Asian end-users preferring spot ethylene cargoes over the highly priced spot naphtha supplies.
Naphtha prices had been hovering around the $900/tonne CFR Japan mark since the second half of February, although prices had fallen to around $863-866/tonne CFR Japan for the first half of May delivery after crude oil prices fell from record highs of $111/barrel to current levels of $102/barrel.
By: Desmond Chia
+65 6780 4359
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