Asia naphtha spreads widening on northeast deals

22 April 2008 10:16  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha inter-month spreads were seen slowly widening after narrowing to $1/tonne (€0.63/tonne) on Friday, industry sources said on Tuesday.

The inter-month spreads widened to $1.50/tonne this week as northeast Asian end-users lent support to the market by snapping up cargoes for second half of May and first half of June delivery.

Taiwan's Formosa Petrochemical Co (FPC) has issued a naphtha buy tender for delivery in the second half of June.

The backwardation between the first half of June and first half of July had seen margins narrow to $5/tonne from the beginning of the month to $3.00/tonne early last week, $2/tonne by mid-week, and to $1 at the end of the week.

Some NE Asian end-users had been trying to increase their usage of liquefied petroleum gas (LPG) as a feedstock instead of naphtha due to the latter's high costs.

Naphtha prices hit a latest high of $966.50/tonne CFR late Monday.

The naphtha markets still lagged behind the oil markets as naphtha prices gained 4.79% on the week compared with a spike of 5.26% in Brent crude.

($1 = €0.63)

By: Desmond Chia
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly