Petrotahlil - Asia naphtha markets are finding support from pockets of demand, helping to keep spot prices afloat, along with the product's crack spread.
Open-specification naphtha prices for first-half September delivery averaged at around $409.25/tonne CFR (cost and freight) Japan at early hours session on Tuesday, holding on to the previous session’s close.
Spot naphtha prices continue to hold above the $400/tonne mark, buoyed by steady demand amid overall healthy downstream margins, ICIS data shows.
Taiwan’s Formosa Petrochemical (FPCC), a key importer of the petrochemical feedstock has bought 100,000 tonnes of spot naphtha cargoes for delivery in the first-half of September.
Spot buying of September parcels are helping to absorb regional naphtha supply.
South Korea’s Yeochun NCC (YNCC) purchased two cargoes of around 25,000 tonnes each of open-specification naphtha at a premium of $11.75/tonne to spot CFR Japan quotes.
That said, the demand may well taper off slightly as scheduled cracker maintenance takes place.
FPCC will conduct a planned turnaround at its No 3 cracker from mid-August, and skipped its tender for second-half August delivery supplies.
Market expectations of lesser deep-sea cargoes from northwest Europe destined to Asia in August is set to keep the overall supply balance in check.
Elsewhere, India’s Bharat Petroleum Corp Ltd (BPCL) cancelled a spot tender to export naphtha for early-August loading.
Asia naphtha’s crack spread closed at $85.10/tonne on 27 May, up from $63.13/tonne a week earlier and the highest since 9 July.
Follow us on twitter @petrotahlil