NEW DELHI: Asia’s naphtha markets weakened for a sixth consecutive session on Thursday, and flipped into contango structure by $1 after inventories at the key trading hub of Singapore rose to an over three-month high.

The crack dropped to $6.15 a tonne, the lowest level since May 2020 and down $9.63 from the last close.

Naphtha margins have shed over 92% this month due to poor demand from petrochemical units in the region and dwindling Chinese consumption as an aftermath of COVID-19 lockdowns, while supplies remain abundant.

“Multiple crackers in Asia continue to keep their run rate around 80-90% as downstream petrochemical margins remain low,” wrote Mohammed Yasser, a senior analyst at Refinitiv Oil Research in a note, adding that some crackers were expected to extend cuts to an additional 5% in June to limit losses.

Singapore’s inventories of light distillates increased by 1.717 million barrels to 15.461 million barrels in the week to May 25, data from Enterprise Singapore showed.

India’s state-run refiner Indian Oil Corp sold 35,000 tonnes of heavy full-range naphtha at about a premium of $24-$26 per tonne for loading during first-half June.