Asia's naphtha crack ended the week at a three-month low of $37.55 a tonne, under pressure from plentiful supplies. The weak fundamentals flipped premiums in South Korea into discounts for the first time since December. YNCC bought a cargo for second-half June arrival at Yeosu at slight discounts to Japan quotes on a cost-and-freight (C&F) basis, industry sources said.
This contrasted with a premium of $4.50 a tonne YNCC had paid on April 26.
In addition to high supply levels, recent cracker outages have also hit the market. Japan's Mitsui Chemical's 612,000 tonnes per year Ichihara cracker has been shut since last week following a glitch. The cracker is expected to resume operations by Sunday.
Taiwan's Formosa Petrochemical, Asia's top naphtha importer, had to sell heavy naphtha for May and June loading from Mailiao as a nearby petrochemical plant was unable to process the fuel following a fire. India's BPCL sold 35,000 tonnes of naphtha to Glencore for May 15-16 loading from Kochi after cancelling the sales tender previously, industry sources said.
This brought BPCL's total May exports to 100,000 tonnes, making this its highest monthly exports this year. Lotte Chemical Corp said on Friday that its US ethane cracker in Louisiana is expected to commence commercial operations within May. Asia's gasoline crack rose to a four-session high of $4.69 a barrel, tracking the stronger European market following a dive in inventories.
Gasoline stocks in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub plunged 17.8 percent in the week to Thursday to reach an eight-month low of 847,000 tonnes, data from Dutch consultancy Insights Global showed. Naphtha stocks, in contrast, were at a six-week high of 278,000 tonnes, the data showed. Despite the stronger gasoline crack, the overall distillates crack values are dragging on Asia's refining margins.