Asia's naphtha recovers from nine month low

Asia's naphtha crack recovered from a near 9-month low to a two-session high of $51.75 a tonne on Thursday but oversupply persisted, causing the fuel's front-month price to fall below that of the following month for the first time since March 13. Front-month second-half August naphtha price was $1.00 a tonne lower than second-half September value, reflecting that intermonth spreads were now in contango. Discounts given on spot cargoes widened in view of the weakening fundamentals.
South Korea's YNCC bought around 75,000 tonnes of naphtha from the spot market for second-half August delivery at a discount of about $3.00 a tonne to Japan quotes on a cost-and-freight (C&F) basis. Early this week, LG Chem had paid a narrower discount of $1.25 a tonne for cargoes delivering in first-half August. India's Bharat Petroleum Corp Ltd (BPCL) offered 33,000 tonnes of naphtha for July 25-27 loading from Mumbai, bringing its total July shipment to 156,000 tonnes.
This makes it the highest monthly volumes sold and offered by BPCL since March. Indian Oil Corp (IOC) sold up to 30,000 tonnes of naphtha for July 26-28 loading from Kandla to Total at premiums in the low single-digit level to its own price formula on a free-on-board (FOB) basis. Oil & Natural Gas Corp (ONGC) sold 35,000 tonnes of naphtha for July 22-23 loading from Mumbai to Trafigura at premiums above the mid-single digit level to Middle East quotes on a FOB basis.
Reliance Industries sold 55,000 tonnes of naphtha for Aug 1-3 loading from Sikka to an Asian buyer at premiums of about $5 a tonne to Middle East quotes on a FOB basis. Asia's gasoline crack was near a two-week high of $9.50 a barrel. Singapore's onshore light distillates, which comprise mostly gasoline and blending components for petrol, eased 3.5 percent, or 392,000 barrels, to reach a two-week low of 10.75 million barrels in the week to July 5, official data showed. Some 257,420 tonnes of gasoline were shipped to Indonesia alone, the data showed, highest weekly volume sent to the latter since the week to mid February.