Asia's naphtha crack fell for a seventh session running to hit a seven-week low of $40.80 a tonne on Tuesday on persistently weaker fundamentals than a month ago. Naphtha arriving in Asia from the West, including Europe and the Mediterranean, in April is expected to be slightly more than 1.6 million tonnes, Refinitiv Oil Research said in a weekly report.
Although this is down more than 20 percent compared with March cargoes, the volumes are still slightly above 2018's monthly average of 1.58 million tonnes. Industry sources said the market is not lacking in naphtha cargoes as some Asian and Middle Eastern refineries prepare to return from scheduled maintenance.
Formosa Petrochemical Corp, for instance, will raise throughput at its 540,000 barrels per day (bpd) Mailiao refinery to more than 82 percent from the second half of April. That compares with current run rates below 70 percent of full capacity because of planned maintenance at a crude distillation unit. All three of its crackers are at full-tilt and it is too early to determine if any intentional run cuts are necessary after a fire at its sister company Formosa Chemicals & Fibre Corp (FCFC) on Sunday.
Formosa Petrochemical supplies pyrolysis gasoline or pygas, a by-product from naphtha cracking, to FCFC. Asia's gasoline crack edged up by 1 cent to, edging above a high this week of $6.74 a barrel, supported by demand. A glitch in a refinery in South Korea could have also given the market some support, industry sources said. S-Oil Corp is expected to keep its 73,000 bpd residue fluid catalytic cracker (RFCC) shut until the end of April after a technical glitch. The unit has been down since late March.