Asian naphtha crack spread falls below $20/tonne on supply glut

08 June 2012 11:13  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s naphtha crack spread fell below $20/tonne (€16/tonne) on Friday, because of regional supply glut and poor downstream demand, traders said.

The prompt crack spread versus Brent crude futures narrowed to $17.65/tonne on 8 June, ICIS data showed.

“This [is] maybe one of the lowest crack spreads ever,” a trader said.

Open-spec naphtha prices for the second half of July plunged to $747.00-749.00/tonne CFR (cost & freight) Japan on Friday, down by $34/tonne, while ICE Brent was at $97.38/bbl.

“With crackers cutting operating rates because of poor product margins, and [an] influx of arbitrage cargoes, there is plenty of naphtha [in the region],” a trader said.

Weak downstream demand from the key petrochemical products weighed on buying interests of cracker operators, traders said.

($1 = €0.79)

By: Ong Sheau Ling
+65 6780 4359

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