Tight supply, firm aromatics to support Asia's heavy naphtha premiums

04 October 2012 05:54  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s spot premiums for heavy naphtha are expected to be stable, underpinned by tight supply and a firm aromatics market, traders said on Thursday.

The premium has been hovering at $60.00/tonne (€46.80/tonne) to Japan quotes CFR (cost & freight) since May, they added.

“There is limited supply of heavy naphtha,” said a trader, adding that the deep-sea flows from northwest Europe, the Mediterranean and Russia were tight.

Usually, the Western markets ship out heavy naphtha supplies to Asia, traders said.

Asia is unlikely to receive further deep-sea flows from northwest Europe and the Mediterranean, after 250,000-300,000 tonnes of European naphtha was booked to arrive in Asia between end-October and first-half November.

The volumes were not significant compared with the 500,000-700,000 tonnes of European naphtha that arrived in Asia from August to September.

Strong gasoline demand in West Africa has prompted European refiners to divert some naphtha supplies to the gasoline blending pool for exports to West Africa, traders said.

Meanwhile, the toluene market in northeast (NE) Asia was firm, with prices rising by $15-20/tonne in the week ended 28 September to $1,195-1,205/tonne CFR NE Asia, according to ICIS data.

The supply of prompt toluene cargoes from NE Asia continues to be tight, with most producers unable to meet the enquiries from their buyers amid limited cargoes in their inventories, market players had said.

Heavy naphtha is used in a reformer which is then converted to be reformates, used for making higher-octane gasoline. Heavy naphtha is also used to make aromatics products.

Additional reporting by Jasmine Khoo

($1 = 0.78)

By: Felicia Loo

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