08 July 2008 05:31 [Source: ICIS news]
SINGAPORE (ICIS news)--Asian naphtha spreads are weakening on softening demand from northeast (NE) Asian end-users and increased supplies from Europe, industry sources said on Tuesday.
In the Asian CFR (cost and freight) Japan market, the backwardation spreads between second half of August and second half of September had crunched by $2.50/tonne to $8.50/tonne since the end of June.
The spreads between first half of September and first half of October, also narrowed by $2.75/tonne to $5.25/tonne over the same period.
Most NE Asian end-users had covered their August requirements since mid-June.
The influx of about 250,000 tonnes of naphtha supplies from Europe in July was expected to ease the snug situation in the market, sources said.
India’s increase in naphtha exports had also eased the tightness. India was expected to export 850,000-900,000 tonnes of naphtha in July and 800,000 tonnes in August. Original estimates were pegged at 750,000-800,000 tonnes per month.
Players also expected the market to be slightly weaker in August and September due to the spate of turnarounds at naphtha crackers in Taiwan.
Asian naphtha prices were up 0.61% versus gains of 1.06% in the Brent crude markets since the end of June.
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