Asian naphtha prices rose on Tuesday on stronger crude, but the premium against Brent was steady amid concerns over weaker ethylene rates that could hurt demand from petrochemical producers. The key open-spec naphtha contract for second-half August stood at $714.50 a tonne on a cost-and-freight (C&F) basis, up from $706.00 in the previous session.
The ICE Brent/naphtha crack edged down to $170.75 a tonne for the second-half of August, slightly lower than $171.00 in the previous session. ICE August Brent crude was down 28 cents at $72.35 a barrel by 0318 GMT, but was higher by more than $1 from Monday's Asian trading.
The backwardation between the second halves of August and September narrowed to $6.50 from $7.00 on Monday. "Prices are instantly up on Brent which could hurt demand, but petrochemical producers are closely watching the crack," said a Seoul-based trader. Ethylene premiums to naphtha are at $300 a tonne, about $100 a tonne lower compared to earlier this year, versus $350 in June.
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