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Jun 02, 2020 PRINT EDITION
Business

Asia's naphtha recovers but gasoline continues to fall

Asia's naphtha rebounded from a five-month low to reach a three-session high of $58.35 a tonne on Friday, as raw material costs fell and demand rose this week. Japan's Asahi Kasei bought the light fuel for second-half April delivery at premiums of $7 to $

March 03, 2020

Asia's naphtha rebounded from a five-month low to reach a three-session high of $58.35 a tonne on Friday, as raw material costs fell and demand rose this week. Japan's Asahi Kasei bought the light fuel for second-half April delivery at premiums of $7 to $8 a tonne to Japan quotes on a cost-and-freight (C&F) basis, but this was based on first-half March pricing formula, industry sources said.
Mitsui Chemicals also bought naphtha for first-half April delivery to Chiba, at a premium of about $13 a tonne to Japan quotes on a C&F basis. These purchases came after buyers from China, South Korea, Taiwan and Southeast Asia snapped up more than 240,000 tonnes of naphtha for April delivery in about two days.
However, naphtha crack has lost more than 42% of its value compared to its January 14 peak.
Meanwhile, Brent crude prices dived to their lowest in over a year. India's Bharat Petroleum Corp Ltd (BPCL) has offered two 35,000-tonne naphtha cargoes for March 9-10 and March 19-20 loading from Mumbai and Kochi respectively through a tender closing on March 3.
BPCL had recently sold a cargo for early March loading from Mumbai to Vitol at premiums of about $22.50 to $23.00 a tonne to its own price formula on a free-on-board (FOB) basis. This was lower compared to the $34.00 to $34.50 a tonne premium BPCL had fetched for a cargo sold to Vitol for first-half February loading from the same port.
Asia's gasoline crack extended losses to reach a 4-1/2 week low of $3.98 a barrel as the persistent, fast-spreading virus limited travel and overshadowed falling inventories across key regions. Gasoline held independently at the storage and refining hub of Amsterdam-Rotterdam-Antwerp (ARA) fell 6.1% or 73,000 tonnes, its second straight weekly fall, to reach a three-week low of 1.12 million tonnes in the week to February 27, data from Dutch consultancy Insights Global showed. Inventories in the United States and Singapore also fell.

Copyright Reuters, 2020