28 February 2013 09:54 [Source: ICIS news]
SINGAPORE (ICIS)--Asia’s open-spec naphtha prices tumbled to below $1,000/tonne (€760/tonne)on Thursday, undermined by a few physical trades that underscored the growing fragility of the market, traders said.
“The market has been so volatile this week – swinging up and down,” said one trader.
At the close of trade on Thursday, naphtha prices fell by $21.00/tonne from Wednesday to $997.00-999.00/tonne CFR (cost & freight) Japan, the weakest since 29 January when prices closed at $983.50-985.50/tonne, according to ICIS data.
The naphtha crack spread against Brent crude futures narrowed to $158.00/tonne on Thursday from $169.18/tonne on Wednesday, while the spread between the first-half April/first-half May contracts lost $2.00/tonne to $34.00/tonne in backwardation over the same period, the data indicated.
Naphtha prices took a beating despite a rebound in Brent crude futures from the previous session.
Meanwhile, in the physical session on Thursday, Vitol sold the second-half April contract to ITOCHU at $980.00/tonne CFR Japan, and ITOCHU separately bought the second-half April contract from Statoil at $981.00/tonne CFR Japan, traders said.
In addition, Itochu bought from Mabanaft the second-half April/first-half May spread at $17.00/tonne in backwardation, they added.
The Asian naphtha market was not perceived as tight as in the last few weeks because of a huge armada of arbitrage supply from the West, traders said.
“If I look at the offers, the market isn’t as tight as before,” one trader said.
($1 = €0.76)
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