Asian naphtha: contango stable on South Korean bargain hunting

Asian naphtha prices fell slightly on Monday, though the inter-half month spread was stable in contango on support from South Korean bargain-hunting. The key open-spec naphtha contract for second-half May delivery was notionally assessed around $489 a tonne, cost and freight Japan basis, down from $492 on Friday. The contango between the second half of May and the first half of June was $1.50 a tonne, unchanged from Friday.
South Korea's Yeochon Naphtha Cracking Centre (YNCC) was heard to have bought a second-half May delivery open-spec naphtha cargo at $6 a tonne discount to spot Japan quotes.
The discount level for the cargo was deeper than YNCC's previous purchase, when the company had bought a first-half May delivery cargo at $3.50 discount, reflecting bearish sentiment in the physical market.
"The market has surplus supply at the moment, given high operating rates at oil refiners and expectations for more exports from India," said a trader at South Korean petrochemical producer.
April naphtha swaps were notionally assessed at $51.60 a barrel, free-on-board Singapore basis, down from $51.90 on Friday.
May Brent crude was notionally pegged at around $53.55 a barrel early on Monday, down about 40 cents from Friday's notional assessment during Asian trading.
It settled at $53.93 on the International Petroleum Exchange (IPE) in London on Thursday. IPE was closed on Friday for a public holiday.
The naphtha premium over Brent crude futures, or the Brent/naphtha crack, was $88 a tonne, unchanged from Friday.
Northeast Asian ethylene prices stood around $955 a tonne, unchanged from the previous assessments.
In the Northwest European market, naphtha levels recovered a few dollars on Thursday, although no trades were reported. The market was closed on Friday for a public holiday.
Bids for open spec cargoes with mid-April delivery dates were heard at $471 and $480 per tonne cif NWE, while one offer for open spec material was heard at $483. Vitol offered a cargo with high paraffinic content at $485 per tonne.