Asia naphtha tumbles 6% on hefty crude oil losses
SINGAPORE (ICIS)–Asia naphtha prices dropped to their lowest in more than three months, on sharp losses in global crude oil futures as the coronavirus in China stokes fears of weak demand.
On Tuesday morning, first-half March delivery open-specification naphtha prices averaged at $513/tonne CFR (cost and freight) Japan, falling by 6% from the previous Asia close on 24 January.
The prices are at their lowest since 9 October 2019 at $508/tonne CFR Japan, according to ICIS data.
March ICE Brent crude oil futures stood at $58.98/bbl at midday, after falling earlier by more than 2% overnight amid worries of the deadly illness’ spread having a cooling effect on oil demand, while China extended the week’s Lunar New Year holiday.
Asia naphtha spot physical trade had tapered off just before the seasonal holiday that started on 24 January.
Asia’s naphtha crack spread against March ICE Brent crude oil futures, its refining margin ended at $78.78/tonne on 24 January, spiraling down by some 14% from the previous week’s close at $91.55/tonne.
Weighing on sentiment, deep-sea naphtha volumes from northwest Europe bound for Asia are estimated at around 2.3mn tonnes this month, higher than from average levels near 2m tonnes in December 2019.
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Photo: A container ship is docked at a port during a sunset in Osaka, western Japan. (By Andy Wong/AP/Shutterstock)
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