Asia naphtha in backwardation on NE interest

20 May 2008 09:43  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha inter-month spreads have flipped into backwardation at a premium of $2.00/tonne on renewed buying interest from northeast Asian end-users, according to industry sources on Tuesday.

The resumption of normal production on the crackers at Yeochun Naphtha Cracking Center (YNCC) helped shore up the market.

The spreads between first half of July and first half August in the CFR (cost and freight) Japan naphtha market were seen at a discount of $2.75/tonne early last week but narrowed to parity at the close of the last week as Korean end-users sought term naphtha supplies for the second half of 2008 till second half of 2009.

The second half of July and second half of August spreads are seen at a backwardation of $1.50/tonne, while the spread between the first halves of August and September is seen at plus $0.50/tonne.

All three YNCC crackers had been down due to a power outage since 3 May caused by an explosion in an lighting arrestor unit at Hanwha Chemical. 

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By: Desmond Chia
+65 6780 4359

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