Asia's naphtha front-month first-half February price was $4.75 a tonne lower compared with first-half March, as sellers struggle under heavy stockpiles. Strong fundamentals usually lead to front-month prices being higher than the following month, but massive volumes of western cargoes being pushed to Asia from Europe, the Mediterranean and the United States have created weak market conditions for sellers since the third quarter.
Spot prices of naphtha also fell, with India's Oil & Natural Gas Corp (ONGC) selling 34,500 tonnes of naphtha for January 20-21 loading from Hazira to Total at a premium of about $3.30 a tonne to Middle East quotes on a free-on-board (FOB) basis.
This was down nearly 27 percent compared with a cargo sold for January 6-7 loading from the same port recently to Shell by ONGC.
Sellers were not expecting conditions to improve any time soon.
"It's the cold season but yet we are seeing quite a lot of naphtha coming to Asia from the West including the US," said a trader.
Cold weather usually leads to petrochemical units in the west relying mainly on naphtha, curbing the west-east naphtha flows, as gas becomes more expensive to purchase as it is needed for heating.
Comments
Comments are closed.