Asia's naphtha crack spread rose for the fifth straight session on Monday to hit a nine-month high of $88.08 a tonne on persistent strong demand and supplies were expected to tighten with fewer European cargoes arriving next month in the east. South Korea's KPIC bought for second-half February arrival at Onsan at premiums of at least $1.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis, traders said.
Spot prices in South Korea flipped to a premium on January 6, levels having been stuck at a discount since late November. A lack of alternative liquefied petroleum gas (LPG) which is also used for heating, and high petrochemical run rates in Asia have turned the market around for sellers.
India's Reliance Industries and Mangalore Refinery Petrochemicals Ltd (MRPL) sold cargoes last week at higher premiums as supply tightened. Reliance has sold a 55,000-tonne cargo for early February loading from Sikka at premium between $5 and $7 to Middle East quotes on a free-on-board (FOB) basis versus a premium of $3 to $4 it had fetched for a cargo scheduled for early January loading from the same port.
The buyer of the early February cargo was Vitol, traders said, but this could not be independently confirmed as buyers and sellers do not comment on their deals. MRPL sold to Idemitsu a 35,000-tonne cargo for January 26-28 loading at a premium of about $9 a tonne to Middle East quotes on a FOB basis, whgich compared with the $7 a tonne the refiner had got for a cargo scheduled for January 10-12 loading. This also could not be directly confirmed. Meanwhile a naphtha deal was done in the Singapore cash market after an absence of trade for two weeks between December 23 and January 6.
GASOLINE DOWN Unlike naphtha, gasoline in Asia extended losses for the second straight session to reach a 2-1/2 week low of $9.81 a barrel. The higher stocks in Europe and the US last week continued to weigh on the Asian market. In India Hindustan Petroleum Corp Ltd (HPCL) is expected to restart a secondary gasoline production unit on Tuesday after completing planned maintenance work.
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