Asia naphtha prices surge on crude, strong fundamentals

27 December 2012 01:23  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s naphtha prices rose sharply on Thursday morning, buoyed by robust gains in overnight crude futures globally, traders said.

Open-spec first-half February contract increased by $12.50-13.50/tonne (€9.50-10.26/tonne) from Wednesday at $980.50-983.50/tonne CFR (cost & freight) Japan, the strongest since 17 October when prices stood at $984.50-986.50/tonne CFR Japan, ICIS data showed.

NYMEX WTI crude futures surged by $2.37/bbl to $90.98/bbl for the February contract on Wednesday, while February Brent crude futures rose by $2.27/bbl to $111.07/bbl.

Meanwhile, tightening supply and strong end-user demand in Asia also helped support naphtha prices, traders said.

South Korea’s Honam Petrochemical bought 75,000 tonnes of spot naphtha at a premium of around $16/tonne to Japan quotes CFR, while LG Chem bought a 25,000-tonne naphtha cargo at a premium of $15-16/tonne to Japan quotes CFR.

All the cargoes are scheduled for delivery in the first half of February. Indian refiners are expected to reduce January naphtha exports by 11% from December to 800,000 tonnes in January on the back of refinery maintenance.

India exported an estimated 900,000 tonnes of naphtha in December.

Moreover, Asia is facing lower naphtha inflows from the Middle East because of refinery turnarounds, traders said.

The naphtha crack spread against Brent futures strengthened to $149.70/tonne on Wednesday, the highest since 11 September when the crack spread closed at $150.58/tonne, the data indicated.

($1 = €0.76)

By: Felicia Loo

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