Asia’s naphtha crack spread widens on tighter supply, firm demand

24 December 2012 02:08  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s naphtha crack spread is drawing support from tighter supply from India and the Middle East, at a time of rising demand for the petrochemical feedstock, traders said on Monday.

The naphtha crack spread closed at $137.55/tonne against Brent crude futures on 21 December, widening from $134.15/tonne from 20 December, ICIS data showed.

The crack spread firmed from $122.35/tonne on 14 December, the data indicated.

Open-spec first-half February naphtha contract softened by $3.00-4.00/tonne to $953.50-956.50/tonne CFR (cost & freight) Japan on Monday morning, in line with global crude futures, according to ICIS data. February naphtha contract had risen by $20/tonne in the week ended 21 December.

India is expected to export 800,000 tonnes of naphtha in January, down by around 11% from the exports made in December because of refinery maintenance. Indian refiners exported an estimated 900,000 tonnes of naphtha in December.

In addition, there is limited supply from the Middle East because of refinery maintenance, traders said.

Meanwhile, demand from the northeast Asian end-users is rising, they added.

Formosa Petrochemical Corp (FPCC) bought via tender 120,000-150,000 tonnes of spot naphtha for delivery to Mailiao from the second half of January to early February. The deals for the cargoes were done at a premium of $11-12/tonne to Japan quotes CFR.

The premiums awarded in a few Indian tenders were also firmer, traders said.

India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) sold by tender a 35,000 tonne naphtha cargo to Japan’s Mitsubishi Corp at a premium of $45/tonne (€34/tonne) to Middle East quotes FOB (free on board).

The cargo is scheduled for loading from the New Mangalore port on 20-22 January.

In its previous tender, MPRL sold 35,000 tonne naphtha to Japanese trading firm Marubeni at a premium of $32.25/tonne to Middle East quotes FOB for loading on 28-30 December.


By: Felicia Loo



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