01 August 2012 11:45 [Source: ICIS news]
At the close of trade on Wednesday, the naphtha crack spread against September Brent was at $80.20/bbl, according to ICIS.
Crack spread has been rising this week, reversing the previous week’s declining trend.
“Crack spread is slowly improving as market becomes aware that the demand is returning,” a Singapore-based trader said, adding that improving product margins is primarily supporting the physical demand for naphtha.
“Expectation that European arbitrage cargoes may come less in September or October because of improved pricing in Europe and stronger demand in the US lifted the buying sentiment [in Asia],” a South Korean cracker operator said.
Open-spec naphtha prices for second-half September contracts were assessed at $867.00-869.00/tonne CFR (cost and freight) at the end of Wednesday’s trade, up $18.50/tonne from Tuesday, according to ICIS.
Spot ethylene prices were assessed as $1,130-1,160/tonne
“Intermonth spread has also started to widen to show that market outlook is not as bearish anymore,” another Singapore-based trader said.
The intermonth spread of naphtha contracts between second-half September and second-half October contracts was assessed on Wednesday at a wider backwardation of $6.50/tonne than Tuesday’s $4.00/tonne, according to ICIS.
($1 = €0.82)
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