SINGAPORE: Steady demand helped Asia's naphtha crack recover marginally to $57.50 a tonne from a five-month low hit in the previous session.
- Hanwha Total was among the first in South Korea to issue a tender to buy naphtha for first-half July naphtha.
- It paid premiums in the low single-digit levels to Japan quotes on a cost-and-freight (C&F) basis.
- This came a few days after Chinese Unipec had paid high single-digit level premiums to Japan quotes on a cost-and-freight (C&F) basis for a naphtha cargo scheduled for delivery to China in the first half of July.
- Malaysia-based Titan could also be looking to buy naphtha.
TENDERS: India's Oil & Natural Gas Corp (ONGC) has cancelled an offer for 30,000 tonnes of naphtha loading from Hazira on June 2-3 due to domestic demand.
- Reliance Industries has sold 55,000 tonnes for June loading from Sikka at premiums in the high single-digit levels to Middle East quotes on a free-on-board (FOB) basis to an Asian buyer.
- This was down compared with an average of nearly $15-a-tonne premium it had fetched for three 55,000-tonne cargoes sold for May loading.
- Hindustan Petroleum Corp Ltd (HPCL) has also sold a June cargo at premiums of $5 to $6 a tonne to Middle East quotes on a FOB basis.
GASOLINE MARGINS: Asia's gasoline margin was at a four-session high of $10.50 a barrel.
- US gasoline demand has been weaker than expected this year, but a growing economy and relatively cheap pump prices have the energy industry expecting record demand again this summer.
STOCK LEVELS: Naphtha stocks held independently in Europe's Amsterdam-Rotterdam-Antwerp hub fell 7.08 percent to 341,000 tonnes in the week to May 18, but this was still more than double the inventories from a year ago, data from consultants PJK International showed.
- Given more excess supplies in Europe, Asia is expected to receive about 1.2 million tonnes of naphtha from the West, including Europe and the Mediterranean next month, up 30 percent from volumes in May.
- The provisional June shipments also mark the highest monthly volumes booked for Asia's arrival since Jan.
- On the other hand, gasoline stocks held in ARA was up 2.4 percent to nearly 1.05 million barrels in the week ended May 18.
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