UpdateAsia to receive sharply lower Europe naphtha supply in March

02 February 2012 03:27  [Source: ICIS news]

(adds paragraphs 5 & 6 on naphtha demand, crack spread)

SINGAPORE (ICIS)--Asia is expected to receive 110,000-150,000 tonnes of arbitrage naphtha from Europe in March, down from 420,000 tonnes slated to arrive in February, traders said on Thursday.

European refiners are using more naphtha for gasoline blending, while high liquefied petroleum gas (LPG) prices have prompted European crackers to use more naphtha instead, they added.

“Supplies are very tight in Asia,” said one trader.

In January, some 250,000-300,000 tonnes of European naphtha arrived in Asia, traders said.

Demand, on the other hand, was firm, with Taiwan’s Formosa Petrochemical Corp (FPCC) buying 120,000-150,000 tonnes of naphtha for delivery in the second half of March, on top of healthy spot purchases from South Korea, traders said.

The inter-month spread between the second half of March and the second half of April contracts strengthened to a backwardation of $11.00/tonne (€8.36/tonne) from $6.00/tonne last week, ICIS data showed.

($1 = €0.76)

By: Felicia Loo

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