Asia's naphtha crack fell to $99 a tonne on Monday as expectations of high supplies coming to the East next month from Europe pushed it lower for the third straight session. There were also concerns that the UAE's ADNOC could start shipping out more naphtha in June as it was ramping up run rates at its newly expanded Ruwais refinery which was operating at close to 60 percent of its capacity.
The refiner, on the other hand, would stop importing gasoline once operations at its residue fluid catalytic cracker (RFCC) stabilises. ADNOC has more than doubled Ruwais' capacity to over 800,000 barrels per day (bpd), with traders expecting its yearly naphtha exports to increase to more than 10 million tonnes versus about 7.5 million tonnes before the expansion.
But for now, demand for naphtha was strong as petrochemical makers have limited access to cheap alternative liquefied petroleum gas (LPG). South Korea's LG Chem was seeking naphtha from second-half May delivery but the results were not known. Traders estimated the premium to be at least $10 a tonne to Japan quotes on a cost-and-freight (C&F) basis.
It had on April 13 paid around $9 to $10 a tonne premium for naphtha scheduled for the same delivery period of second-half May. In China, a domestic supply squeezed has prompted PetroChina to import naphtha for its Fushun petrochemical plant in for the first time, the company said in a statement.
Unipec, the trading arm of China's top refiner Sinopec, has been aggressively buying naphtha for China since the fourth quarter of 2014. India's Oil and Natural Gas Corp (ONGC) sold a naphtha cargo for May 4-5 loading from Hazira to Total at $26 a tonne above Middle East quotes on a free-on-board (FOB) basis, traders said. The premium was nearly 7.1 percent and 30 percent lower versus two April cargoes it sold from Hazira.
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