NewsFlashAsia naphtha premium up on tight supply

20 February 2008 03:23  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha premiums for full range grades have risen by up to $4/tonne this week from early February as supply for April delivery was tight, traders said on Wednesday.

Northeast Asian end-users expect to pay at least $7.00/tonne CFR (cost and freight) for April cargoes, compared with premiums of $3.00-4.00/tonne CFR Japan quotes for March delivery.

First half April prices were notionally pegged at $908.00-911.00/tonne CFR Japan and second half of April at $903.00-906.00/tonne CFR.

The tightness resulted from the larger-than-expected spot purchases by Taiwanese end-users who snapped up 525,000 tonnes of naphtha for March-April delivery.  

An additional 60,000 tonnes of naphtha cargoes from Europe, on top of recent arbitrage imports estimated at 480,000 tonnes, could ease the tight supply in Asia in March, a Singapore-based trader said.  

On the other hand, the spike in naphtha premiums has caused South Korean end-users to hesitate in finalising their April requirements early.

"We have been lucky to cover our March requirements at premiums of $3.00/tonne CFR to Japan quotes for delivery to northeast Asia last week. But we will have to monitor the situation closely," a Korean buyer lamented.

Demand from Japan and Korea is expected to taper off from March till June due to the start of the turnaround season which would see around eight crackers offline.

ICIS Copyright © Reed Business Information 2009

Author: Desmond Chia
+65 6780 4359

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