02 May 2013 17:51 [Source: ICIS news]
(adds response from the trader that was said to have withdrawn its shipments)
LONDON (ICIS)--Around 1m tonnes of deep-sea naphtha from Europe is expected to head to Asia in May, for delivery in June, traders said on Thursday.
Most of the naphtha volumes are heading from the Mediterranean to Asia, with far less supply from northwest Europe, sources said.
A favourable “east-west spread” of $28/tonne between northwest Europe to Asia earlier in the week had led to vessels being booked from the region to Asia.
"I think we will end up sending around 1-1.2m tonnes this month," said one trader.
However, another suggested that the narrowing of the spread to $25/tonne on Thursday meant that a few of the shipments had been withdrawn.
Another added: “Today a few ships have been dropped. EW [east-west spread] is now $25/tonne at the front. Have to see what other boats get dropped.”
A source at the trader that was said to have withdrawn its shipment said it was done due to temporary logistical difficulties which had been overcome, and not due to an unfavourable price spread between Europe and Asia.
The old vessel has now been replaced by a new one, the source added.
The arbitrage from the Mediterranean is still open, the source said: “All Med barrels are going there.”
The volume of naphtha being sent from Europe to Asia “is way too much” for the Asian market to absorb, the trader added.
Around 600,000 tonnes/month of naphtha move from Europe to Asia on a regular basis, according to trading sources.
($1 = €0.76)
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