02 March 2012 05:33 [Source: ICIS news]
By Quintella Koh
At 04:00 GMT, open-spec naphtha prices in Asia were at $1,112.50-1,115.50/tonne (€834.38-836.63/tonne) CFR (cost & freight)
Naphtha prices breached the $1,114.00/tonne CFR Japan level set on 23 May 2008, according to ICIS data.
“Producers are moving into the spot market very quickly to take advantage of current high prices,” said a trader.
HPCL’s tender beat the record set by Indian Oil Corp’s (IOC) 38,000-40,000 tonnes of naphtha for loading from Dahej on 26-28 March that was sold to Japan’s Itochu at a premium of $46.00/tonne.
More tender sales were issued during the course of the week, including Indian refiner Oil and Natural Gas Corp’s (ONGC) 35,000 tonnes of naphtha for loading from Hazira on 25-26 March.
The tender closes at 09:30
This is ONGC’s second offer for a naphtha parcel via tender this week.
The company has also offered by tender 35,000 tonnes of naphtha for loading from Mumbai on 21-22 March, on 29 February.
IOC has also issued a tender on 28 February to sell 30,000 tonnes of naphtha for loading from Kandla on 26-28 March.
“While many traders and buyers agree that the current sentiment is bullish, many are wondering if this is just a dead cat bounce scenario,” said the trader.
“Global economic data, such as the unemployment figures in the eurozone are all bearish indicators for 2012,” he added.
The unemployment rate in the 17 countries that use the euro rose to 10.7% to 16.9m in January, while December's figure in 2011 was revised up to 10.6% from 10.4%, official data showed.
Asian naphtha traders appear to derive little assurance that the tight supply condition will ease soon, even with almost 1m tonnes of deep-sea cargoes scheduled to arrive in the region between the second half of March and the second half of April.
“There is too much uncertainty, as too many factors could affect the estimated arrival time of these [naphtha] cargoes. Many buyers prefer to cover themselves with regional cargoes at this point,” said a second trader.
Other crude-related products, such as butane, also clocked price hikes. Maleic anhydride producers in
($1 = €0.75)
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