Asia's naphtha physical remained at a discount for the fourth straight session after flipping into the negative zone for the first time last week in more than a decade due to weaker-than-expected demand caused by cracker shutdown. Benchmark open-specification naphtha margin were at a discount of $3.50 a tonne to Brent crude, a marked increase compared to discounts of $15.38 and $9.80 on Friday and Monday, respectively.
Buying interest emerged and LG Chem is expected to restart its mega-scale cracker next week after shutting it down unexpectedly last week. South Korea's YNCC bought more than 50,000 tonnes of open-specification grade cargoes for second-half July delivery to Yeosu at discounts of about $5.75 a tonne to Japan quotes on a cost-and-freight (C&F) basis, lowest price it has paid since December 2018. This came a day after KPIC resumed purchases after an absence of at least two months.
KPIC bought on Monday a full-range naphtha cargo for first-half August arrival at Onsan at a single-digit a tonne discount to Japan quotes on a cost-and-freight (C&F) basis. The petrochemical maker was last seen with tenders to buy March cargoes which it bought at premiums. More Middle Eastern cargoes were seen in May at up to 2.7 million tonnes, making this the highest for 2019, said a weekly note by the Refinitiv Oil Research team.
Western cargoes arriving in Asia this month are expected to be within a range of 1.2 to 1.3 million tonnes, making this the lowest monthly arrivals in about a year as weak spot prices kept cargoes in check. India's MRPL has offered 35,000 tonnes of naphtha for June 26-28 loading from New Mangalore through a tender closing on June 14.