SINGAPORE: Asia's naphtha crack snapped seven straight sessions of losses on Friday, recovering from a 1-1/2 year low to a three-session high of $39.58 a tonne, tracking Brent oil's gains.
Heavy supplies however persisted and traders expect the weak outlook to last through third quarter and could even extend into fourth quarter.
Traders said the weak fundamentals could have prompted South Korea's Hanwha Total to withdraw an offer for naphtha scheduled for first-half August lifting although this could not be directly confirmed.
India's Reliance Industries went ahead with a sale of a 55,000-tonne naphtha cargo for Aug. 3-7 loading from Sikka but at flat to a premium of $1 a tonne to Middle East quotes on a free-on-board (FOB) basis.
Not only was the price level at least four times lower than a 55,000-tonne cargo sold for mid-July loading, it was also the lowest Reliance has achieved since late 2008 when the financial crisis hit, Reuters data showed.
"Given the market situation, buyers will give low bids," said a trader.
LG Chem on the other picked up 50,000 to 75,000 tonnes of naphtha at a discount of $5.50 to $6.00 a tonne to Japan quotes on a cost-and-freight (C&F) basis, making this the last tender for cargoes delivering to South Korea in second-half August.
Prices in South Korea have fallen to a two-month low of $6 a tonne on July 13.
GASOLINE UP
Asia's gasoline crack rose to a 1-1/2 week high of $3.71 a barrel following recent shipments of cargoes to South America and Mexico. But supplies were still considered high compared to previous years of the same period as May to July typically marks the peak demand period.
Cash deals for gasoline in Singapore were absent for the first time in a month.
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