Asia's naphtha crack rose for the fourth straight session to reach a near four-week high of $57.60 a tonne on Tuesday as buyers came forward to buy the fuel for June. June is also a time where most crackers in Japan and South Korea would have completed their scheduled maintenance, which would typically translate to higher demand for naphtha.
Malaysia-based Titan and parent company Lotte Chemical were looking to buy naphtha for first-half June. Lotte paid about $5 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis, traders said, while Titan's tender is to be awarded on Wednesday.
Hanwha Petrochemical had in the previous day scooped up heavy full-range naphtha for first-half June arrival at Daesan at premiums of $5 to $6 a tonne to Japan quotes on a C&F basis. Taiwan's Formosa Petrochemical Corp in the meantime had sold up to four medium-range vessel size heavy naphtha cargoes for May loading as its sister company was unable to absorb the feedstock following a fire on April 7.
Formosa usually buys heavy naphtha and open-specification grade as its supplies from its Mailiao refinery are not sufficient to meet demand. Bangladesh Petroleum Corp (BPC) is selling 170,000 barrels of naphtha to Vitol Asia at a discount of $2.17 to Singapore quotes, officials said.
Vitol Asia was the sole bidder for the tender, which opened on April 3, for the cargo lifting over April 22-14 on a free-on-board (FOB) basis from Chittagong. China exported 1.69 million tonnes in March, almost similar to last March's 1.7 million tonnes but sharply higher than this year's February at 550,000 tonnes, customs data showed.
US gasoline inventories are projected to have fallen for the tenth straight week, this time by 300,000 barrels, a preliminary Reuters poll showed on Monday. South Korea's refiners are set to return to the black when they report first-quarter earnings this week, and are expected to do even better in the current quarter as reduced gasoline supplies and the US driving season bolster margins.