Asia's naphtha crack slipped to a 1-1/2-week low of $68.78 a tonne, weighed down by high Brent crude prices at above $64 a barrel. But naphtha fundamentals have improved this week for sellers as supplies were not as plentiful as before, traders said. This has supported prices by either keeping them stable or pushing them higher than before.
South Korea's GS Caltex, for instance, paid a premium of around $7 a tonne for heavy full-range naphtha scheduled for first-half April delivery. This was similar to the premiums Hanwha Total paid on February 20 and premiums SK Energy paid on February 8. LG Chem had also bought naphtha for first-half April delivery but of a lighter grade at premiums of about $2 a tonne.
It was unclear if the fuel was scheduled for Yeosu or Daesan arrival as LG Chem operates a cracker each at these locations. LG Chem on February 12 paid 50 cents a tonne premium for naphtha scheduled for February 12 arrivals at Yeosu. Some buyers who were out to seek term cargoes could have been affected by the stronger fundamental, traders said.
India's Bharat Petroleum Corp Ltd (BPCL) sold 25,000 tonnes of naphtha with a minimum paraffin content of 58 percent to Gunvor for March 2-4 loading at premiums of about $5 to $6 a tonne to the refiner's formula on a free-on-board (FOB) basis. But BPCL cancelled the sales of a smaller, 12,000-tonne cargo with a minimum paraffin content of 60 percent, traders said. BPCL shut a crude distillation unit (CDU) at its Kochi refinery on Thursday following a fire.
But sources familiar with the matter said the impact may be minimal as the capacity of the CDU is relatively small compared to the working CDUs in the refinery. Asia's gasoline crack edged up 3 cents to a two-session high of $7.57 a barrel. Singapore's onshore light distillates, which comprise mostly of gasoline and blending components, fell 5.6 percent, 791,000 barrels, to a three-week low of 13.33 million barrels in the week to February 21, official data showed.
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