Asia naphtha loses momentum on crude oil slide – ICIS

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SINGAPORE (ICIS)–Asia’s naphtha prices fell
alongside losses in global crude oil futures,
amid limited demand and burgeoning supply from
deep-sea cargo flows to the region.

On Tuesday morning, open-specification naphtha
prices for first-half January delivery averaged
at $541.00/tonne CFR (cost and freight) Japan,
down by $7.00/tonne from the Asia close on 18
November.

Crude oil prices slumped overnight amid
uncertainty concerning a trade agreement
between the US and China. January ICE Brent
crude oil futures settled lower by more than 1%
at $62.44/bbl.

CFR Japan naphtha prices eased to a one-week
low, although still higher than $532.00/tonne
levels a month earlier, according to ICIS data.

Naphtha physical buying has been steady at
best, while cargo premiums have since eased.

Taiwan’s Formosa Petrochemical (FPCC) bought
80,000-90,000 tonnes of open-specification
naphtha for 21-31 December delivery to Mailiao
at a premium of around $18/tonne to its pricing
formula.

The premium was down from at least $24/tonne
premium levels FPCC forked out for first-half
December supplies.

Taiwan’s state-owned CPC Corp has yet to issue
spot buying tenders for December cargoes, as
its No 4 cracker with a 385,000 tonne/year
ethylene capacity is undergoing
scheduled maintenance
from early November
until January 2020.

On the arbitrage front, stronger cargo arrivals
from northwest Europe and the Mediterranean
regions may well add to Asia’s surplus supply.

Estimated volumes of over 1.5m tonnes of
western naphtha could reach Asia in November,
up from around 1.0m-1.1m tonnes in October.

Naphtha’s crack spread, a measure of its
refining margin, fell to $73.55/tonne on 18
November, down from the previous close at
$84.15/tonne on 15 November, ICIS data showed.

Focus article by Melanie Wee

Photo: Cranes and containers in Osaka port.
Japan. (Photo by Andy
Wong/AP/Shutterstock)

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