06 May 2008 10:13 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian naphtha cargoes continue to trade at discounts even as the inter-month spreads have widened to $3/tonne this week from $1.50/tonne in the second half of April, industry sources said on Tuesday.
Northeast Asian end-users have lent support to the naphtha market by snapping up cargoes for delivery in the second half of June, with a decrease in supplies from Europe and India also seen as a factor, sources added.
"Although it looks weird that the market continues to trade at discounts, prices remain high after subtracting the discounts from the base prices," a source said. "No-one will want to buy at such hefty levels".
South Korean and Taiwanese end-users had earlier bought more than 275,000 tonnes of naphtha for delivery in the second half of June.
Early this week, South Korean end-users reportedly bought an open spec cargo at discounts of around $0.50-1.50/tonne CFR (cost and freight) Korea for delivery in the second half of June. The previous trade done two weeks earlier was at a discount of $2.00-3.00/tonne for delivery in the first half of June.
Asian naphtha opened $17/tonne higher Tuesday, with second-half June indications pegged at $994-997/tonne CFR Japan. The first half July contract was notionally pegged at $992.50-995.50/tonne and second half July at $991-994/tonne.
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