26 May 2008 05:19 [Source: ICIS news]
The spreads between first half of July and first half August in the CFR (cost and freight) Japan naphtha market, which was seen at discount of $2.75/tonne towards the middle of May, flipped back into backwardation last week due to strong buying interest from northeast Asian end-users.
South Korean end-users dominated the market as they sought term naphtha supplies for the second half of 2008 until the second half of 2009. Taiwanese end-users were also October to December naphtha spot cargoes.
The backwardation has since widened from $3.75/tonne late last week to $5.25/tonne early this week.
The second half of July and second half of August spreads were seen widening by $1/tonne to a backwardation of $4/tonne; while the first half of August and first half of September remained unchanged at $2.50/tonne.
Asian naphtha prices were up 18.34% versus gains of 19.50% in the Brent crude markets since early May.
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