SINGAPORE: Asia's naphtha crack for benchmark open-specification naphtha returned to a near seven-year low on Tuesday for the second time since May 31 as ample supplies and weaker demand weighed.
The front-month crack for the second half of July hit $5.18 a tonne, its lowest since June 13, 2012, when it was at $3.20 a tonne, Reuters data showed.
Weaker demand recently in South Korea and China had offset buying interest from Singapore.
South Korea's May naphtha imports fell by 900,000 tonnes compared with April while China's imports last month dropped by more than 400,000 tonnes month on month, data from Refinitiv Oil Research showed.
On spot trades, industry sources said that at least two more buyers were in the market seeking naphtha, a day after South Korea's GS Caltex had bought heavy full-range naphtha at a premium of about $5 a tonne to Japan quotes cost and freight (C&F).
TERM TALKS: Despite the fragile market fundamentals, Middle Eastern suppliers Kuwait Petroleum Corp (KPC) and ADNOC had managed to command seemingly high premiums for longer-term contracts.
KPC, for instance, late last week finalised premiums of its full-range naphtha scheduled for August 2019 to July 2020, lifting at a premium of $14.50 a tonne to Middle East quotes free on board (FOB).
Its light-grade naphtha for the same lifting period was finalised at a premium of $16 a tonne to its own price formula.
This came in the same month that ADNOC inked a 12-month deal at premiums of $16 to $20 a tonne to its own price formula on an FOB basis.
GASOLINE: Asia's gasoline fared much better than naphtha and the premium was at a five-session high of $2.74 a barrel, though the current level was well short of the $7.46 a year ago.
China's gasoline exports are expected to rise on expanding refining capacity.
Hongrun offered 35,000 tonnes of gasoline for June 20-22 loading from Huangdao, Shandong, through a tender closing on June 6.
This brings its total gasoline offer for June loading to 95,000 tonnes, having recently sold 60,000 tonnes of petrol for June 18-20 loading from Longkou, Shandong, an industry source said.
CNOOC was also looking to sell gasoline on Tuesday, but for July 10-11 loading from Dongguan, Guangdong, through a tender also closing on June 6.
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