Asian naphtha prices rose on Tuesday on higher crude, but the premium against Brent edged down as demand has yet to reappear in the region's sufficiently supplied market. The front-month open-spec naphtha contract for first-half August moved up to $672.50 a tonne on a cost-and-freight (C&F) basis, from $670.50 the previous session.
The ICE Brent/naphtha crack - the premium paid for naphtha compared with Brent prices - inched lower to $138.50 a tonne for first-half August, versus $139 in the previous session. ICE August Brent crude was down 16 cents to $71.20 a barrel by 0357 GMT, but it was about 80 cents stronger than Monday's Asian trading.
The contango between the first halves of August and September steadied at $2.00 a tonne. The market is expecting demand to pick up as the region's two major petrochemical producers are to make purchases to feed their newly turnarounded naphtha crackers.
"The demand is still quiet, but the market is waiting for YNCC and Formosa to make spot purchases soon," said a Seoul-based trader. South Korea's Yeochun Naphtha Cracking Centre (YNCC) is seeking supplies to feed its restarted 550,000 tonnes per year (tpy) No 2 naphtha cracker after deferring a cargo last week, and Taiwan's Formosa Petrochemical is expected to resume its new 1.2 million-tpy cracker within two weeks.
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