11 April 2013 10:45 [Source: ICIS news]
By Cuckoo Susan James and Felicia Loo
LONDON/SINGAPORE (ICIS)--Around 300,000 tonnes of deep-sea naphtha supply from the US are expected to land in Asia in May, aggravating the ample supply situation in the region at a time of weakening petrochemical demand, traders said on Thursday.
“The barrels are from the US Gulf Coast. It’s massive this time,” said a based-Singapore-trader.
The arbitrage volumes from the US Gulf Coast (USGC) are unusually big, traders said. The material is of heavy grade naphtha, they added.
Asia typically receives 30,000-100,000 tonnes of naphtha from the US, traders said.
"Lots of cargoes are moving from USGC to [the] Far East, so [product flow from Northwest Europe to] East will slow down as well. USGC is becoming long gradually," said one trader in London.
With the influx of the US barrels, the spot naphtha premiums transacted in the week have weakened, traders said.
South Korean end-users paid premiums of less than $20/tonne (€15/tonne) to Japan quotes CFR (cost & freight) on naphtha purchases in response to the growing pool of deep-sea supply, while the Indian tenders also saw premiums of below $40/tonne to Middle East quotes FOB (free on board).
($1 = €0.77)
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