Asia naphtha crack spread hits four-month high at $130.55/tonne

27 August 2012 10:58  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s naphtha crack spread surged to a four-month high on Monday, as crude futures continued to rise and spot demand for the petrochemical feedstock firmed up, traders said.

The naphtha crack spread versus October Brent crude futures strengthened to $130.55/tonne (€104.44/tonne), the highest since 25 April, according to ICIS data.

“The front-month [naphtha] oversupply is being cleared,” said a trader.

Open-spec naphtha prices surpassed the $990/tonne mark, closing $12 higher than the session on Friday to $991-993/tonne on Monday, ICIS data showed.

The intermonth spread between the first half of October and the first half of November contracts widened to a backwardation of $9/tonne – the strongest since 20 July, the data showed.

On 24 August, the crack spread was at $120.43/tonne while the backwardation was at $8/tonne.

South Korean crackers are actively buying spot naphtha supplies because they are running their plants at high rates, and prices of alternative propane feedstock make naphtha a more attractive option, traders said.

In physical trading, Glencore sold a second-half October open-spec cargo to Vitol at $987/tonne. Glencore also sold the spread between the first-half October and first-half November contracts to Vitol at $9/tonne, traders said.

($1 = €0.80)

By: Felicia Loo

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