Asia's naphtha prices drifted lower on Tuesday as crude eased and a rash of Indian naphtha offers and the failure to restart a Japanese cracker weighed on the petrochemical feedstock market, traders said.
The key open-spec naphtha contract for the second-half of May shed $13.50 a tonne to $612.00 a tonne, on a cost-and-freight (C&F) basis, from Monday, as US crude oil futures fell by 18 cents to $73.15.
On Monday, it fell $1.84, distancing itself from the $75.35 record-high struck on Friday, as Opec promised to keep pumping at near full capacity. London Brent crude was down 10 cents at $72.90 a barrel, after dropping $1.57 to $73.00. The Asian Brent/naphtha crack for June was locked at $66 a tonne, after it had slumped by $7-$8 a tonne on Monday.
The spread for first-half of June and July widened to minus $2.13 a tonne, on a C&F Japan basis, in contango from minus $1.75 as Sanyo Petrochemical delayed the restart of its 450,000 tonne-per-year naphtha cracker in Western Japan, after discovering an ethylene leak.
"Market sentiment was affected by Sanyo," a Tokyo-based trader said. "If it lasts more than two weeks, it will have a big impact." A spokesman for Sanyo's parent Asahi Kasei said it had not yet set a date for attempting to restart the Mizushima cracker, which closed in mid-March for a planned month-long maintenance shutdown.
On the supply front, three Indian refiners - ONGC, IOC and BPCL - have been offering nearly 100,000 tonnes of naphtha for May loading via tenders to close this week, dragging down the market value, traders said.
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