Asia naphtha crack spread thins down to low single-digit levels
13 June 2012 11:15 [Source: ICIS news]
SINGAPORE (ICIS)--?xml:namespace>Asia’s naphtha crack spread extended its fall, landing at a low single-digit level on Wednesday, because of persistently bearish market sentiment and poor product margins, traders said.
The crack spread between second-half July open-spec naphtha and July Brent crude futures at the close of trade tumbled to $3.27/tonne (€2.62/tonne) from $12.45/tonne on Tuesday, according to ICIS.
“This maybe [is] a three-and-a-half year low,” a South Korean cracker operator said.
Naphtha crack spreads have been steadily falling since end-May.
“At the rate the crack spread is falling, it may just slip into the negative territory,” a Singapore-based trader said.
The second-half July naphtha contract was at $733.00-735.00/tonne CFR (cost and freight) Japan at the close of trade of Wednesday, down by $7.00/tonne from the previous day, according to ICIS.
“There is no support to the cracks. Refineries may still run high, as they could cover their loss, given the robust demand of gasoline,” another cracker operator said.
($1 = €0.80)By: Ong Sheau Ling+65 6780 4359
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