The Asian naphtha crack was mostly flat at $152.95 a tonne on Tuesday as some traders focussed on steady petrochemical demand rather than on the reduction of supply from Europe as shipments go to West Africa for making gasoline. Naphtha can be reformed into gasoline or be used as a motor fuel blend stock. The recent strong gasoline demand in West Africa has led Europe/Mediterranean suppliers to channel naphtha into the gasoline pool.
"But if you were to look at naphtha demand from the petrochemical makers, it has not increased. Additionally, you have liquefied petroleum gas (LPG) being used to replace naphtha in the petrochemical sector," said a trader based in one of the Southeast Asian countries. "How bullish can the naphtha market be apart from fewer western cargoes coming in?"
Trader MRI was seen to have bought a total of 60,000 tonnes of light distillates from two Southeast Asian refiners. One of the cargoes was lifted this week, while another 30,000 tonnes will be lifted from the Philippines around June 1, shipping and trade sources said. The cargoes may be shipped to Singapore, although this could not be confirmed. Bahrain has offered 50,000 tonnes of naphtha for late July loading in a tender expected to be awarded this week. India's Essar Oil has offered 35,000 tonnes for June 24-28 loading from Vadinar through a tender, which is also expected to be awarded this week.