Asia's naphtha crack slumped 19 percent and was near a seven-month low, dragged down by lucrative alternative feedstock prices and rare offers from Egypt at a time when supplies are high. Prices of liquefied petroleum (LPG) gas have been trending down and this could result in more naphtha being replaced by the former, traders said.
"Sentiment is weak given the falling LPG prices and the recent rout in the equities market. Naphtha premiums in South Korea went lower today and the crack value has crashed," said a source who tracked North Asian naphtha deals. South Korea's LG Chem and Japan's Maruzen were both looking to buy naphtha for second-half March delivery.
LG Chem could have paid a premium between $1 and $2 to Japan quotes on a cost-and-freight (C&F) basis, traders said. Maruzen could have paid similar levels, they added.
But the information of the two purchases could not be directly confirmed as buyers do not comment on their deals. Formosa, Asia's top naphtha importer, on the other hand was looking to buy term and spot cargoes of open-specification grade.
The Taiwanese firm, which is using some LPG to replace naphtha, was seeking for cargoes to be delivered from July to December through a term tender which will close on February 9, with offers to stay valid until February 14. Formosa was also separately seeking naphtha from the spot market for either March 16-25 delivery or March 22-31 delivery through a tender closing on February 8. Offers will stay valid until February 9.
Taiwan's CPC has trimmed throughput at its 380,000-tonne-per-year (tpy) cracker to about 80 percent of its capacity, down from an initial 90 percent or more, following a glitch. CPC's larger 720,000 tpy cracker runs were unaffected by the glitch. The Egyptian General Petroleum Corp (EGPC) has offered two 35,000-tonne cargoes for March 4-6 and March 24-26 loading from Suez respectively through a tender closing on February 13, with bids to stay valid until February 22.
Comments
Comments are closed for this article.