Asia's naphtha crack was at a four-session low of $36.58 a tonne on Thursday, battered by weak gasoline fundamentals and rising oil prices. But demand for the fuel from the petrochemical sector was firm, with several buyers spanning from those in Singapore to Malaysia and South Korea seeking cargoes for second-half March delivery.
Trading sources said South Korea's KPIC could have paid a premium of slightly more than $7 a tonne to Japan quotes on a cost-and-freight (C&F) basis for naphtha scheduled for second-half March arrival at Onsan but this could not be directly confirmed. KPIC had on Jan. 28 bought the fuel for first-half March delivery at a premium of $2.50 to $3.50.
Its purchase this week came a day after Hanwha Total had paid similar price levels for naphtha scheduled for the same delivery period of second-half March but to Daesan. Singapore's PCS had also bought naphtha for second-half March delivery but details were not immediately clear. Malaysia's Titan and Taiwan's Formosa were also looking to replenish March stocks.
Asia's gasoline crack discount widened for the third straight session to reach 79 cents a barrel versus 63 cents in the previous session as the supply glut persisted. Singapore's onshore light distillates inventories, which comprise mostly gasoline and blending components for petrol, hit a new high of about 16.5 million barrels in the week to Wednesday, official data showed.
A medium-range vessel size gasoline cargo had arrived in Singapore from the United States, the data showed. The United States does not regularly export gasoline to Singapore due to the distance. Japan's gasoline stocks rose by 240,000 barrels to 10.73 million barrels in the week to Feb. 9, official data showed. Gasoline inventories in the United States were also higher last week.