SINGAPORE: Asia's naphtha crack slipped on Wednesday to a nearly two-month low of $57.25 a tonne on ample supplies as refineries ran at high rates to cash in on low crude prices, traders said.
The weak fundamentals drew South Korean buyer YNCC forward as it sought to lock in low naphtha prices through a 12-month purchase contract starting July.
South Korea's Lotte Chemical, meantime, has bought at least 25,000 tonnes of naphtha at $5 a tonne below Japan quotes on a cost-and-freight (C&F) basis, the first spot purchase tender for second-half June delivery, traders said.
"There is a possibility that prices could go lower. Traders thought that prices could rebound for June cargoes but gasoline failed to support naphtha this time," said a Singapore-based trader.
"There has been a lot of increase in the supplies of light distillates and if this continues into Formosa's cracker turnaround season in August, we will trade at lower prices."
TERM CONTRACTS: Abu Dhabi National Oil Co (ADNOC) insisted on keeping its July 2016 to June 2017 naphtha premiums at its initial offer levels of $12 to $15 a tonne to Middle East quotes on a free-on-board (FOB) basis despite buyers' counter bids on May 3, traders said.
Although these levels were lower than its previous contract for July 2015 to June 2016, fundamentals were weaker now than before, they added.
GASOLINE EASES
Asia's gasoline crack slipped 9 cents to a six-session low of $8 a barrel on ample supplies.
All eyes are on the Ramadan month in June as that is the time when demand hits its peak in Asia.
"Ramadan is the last chance for sellers to sell off their gasoline but Indonesia and Malaysian demand may not be sufficient to turn the market around given the amount of volumes stored on tankers and in land storage," said a trader.
China is a key reason behind the high gasoline supplies other than incoming cargoes from the West, traders said.
China's Sinochem has offered 35,000 tonnes of gasoline for June 12-14 delivery to either Singapore, Malaysia or Vietnam through a tender closing on May 5.
SINGAPORE CASH DEALS: Three deals.
PetroChina bought a 92-octane grade gasoline cargo from PTT for May 19-23 loading at a discount of 60 cents a barrel to Singapore quotes.
Gunvor bought from Trafigura a 92-octane grade gasoline cargo for May 21-25 loading at $52.90 a barrel.
Shell bought from BP a naphtha cargo for second-half June delivery at $394 a tonne.
Comments
Comments are closed for this article.