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SINGAPORE (ICIS)--Asia’s intermonth naphtha spread has weakened to the lowest level in two months, following a physical trade on Wednesday.
The spread between the H1 March open-spec and H2 March open-spec contract narrowed to a backwardation of $10.75/tonne from a backwardation of $12.00/tonne a day earlier, ICIS data showed.
The spread was its weakest since 29 November when the backwardation stood at $7.75/tonne, it indicated.
At the close of trade on Wednesday, the H2 March contract changed hands from Glencore to SOCAR at $935/tonne CFR Japan – the first physical trade following a dry sell for nine successive trading sessions, traders said.
The H1 March open-spec contract fell by $4.75/tonne from 28 January to $938.75-940.75/tonne CFR Japan on Wednesday, according to ICIS data.
Falling downstream ethylene prices put downward pressure on the naphtha feedstock, the traders said.
Ethylene spot prices in northeast Asia fell by $40-50/tonne during the week ended 24 January to $1,480-1,500/tonne CFR NE Asia, while the spot prices in southeast Asia decreased by $30-40/tonne to $1,400-1,440/tonne CFR SE Asia over the same period, ICIS data showed.