30 August 2012 08:18 [Source: ICIS news]
By Felicia Loo
Naphtha prices in Asia firmed up in tandem with the crack spread values in
The light distillates market drew support from gasoline production issues in the
“Fundamentally, the situation in
Indian refiners are estimated to slash naphtha exports to 500,000-600,000 tonnes in September, down by 29-33% from a monthly average of 700,000-900,000 tonnes, because of higher domestic demand for naphtha.
Some refinery maintenance will see a reduction in naphtha output in
The Indian refiners are keen to produce more gasoline than naphtha, given strong gasoline demand and some naphtha is being diverted to the gasoline blending pool.
The intermonth spread between the first half of October and November open-spec naphtha contracts widened by 50 cents/tonne from Tuesday to a backwardation of $10.50/tonne (€8.40/tonne) at the close of trade on Wednesday, the strongest since 20 July, ICIS data showed.
The backwardation stood at $3/tonne on 21 August but has since gained strength on the back of firm fundamentals, traders said.
Open-spec naphtha prices for the first-half October contract rose by $9-10/tonne to $970.50-973.50/tonne CFR
Downstream ethylene prices were underpinned by tight cargo availabilities, with prices assessed at $1,300-1,340/tonne CFR NE Asia on Wednesday compared with $1,130-1,170/tonne CFR NE Asia four weeks ago, ICIS data showed.
Moreover, the chances of booking ample European naphtha supplies for
The east-west spread, which measures the profitability of bringing European naphtha to
On 3 August, the east-west spread stood at $15.87/tonne.
Amid such backdrop, the spot naphtha premiums rose in transactions that took place in the week, traders said
Samsung Total purchased 50,000 tonnes of open-spec naphtha supply for delivery in the first half of October, after skipping spot imports for September delivery.
Rising propane prices make naphtha a more attractive option for Samsung Total. The cargoes were done at a premium of $9/tonne to
The premiums rose sharply from the purchases made by
Honam Petrochemical had bought four naphtha cargoes totalling 100,000 tonnes for delivery into Yeosu and Daesan in the first half of October at a premium of around $2/tonne to
“All tenders are going at very high premiums,” a trader said
($1 = €0.80)
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