SINGAPORE: Asia’s naphtha intermonth spread flipped into the positive zone for the first time in two months as supplies tightened on good demand and lower refinery runs, industry sources said.
The intermonth spread, or the difference between front-month first-half February price and the following month, was at a premium of $1.50 a tonne.
Front-month prices are typically higher than the following month when market fundamentals are strong.
Spot prices in South Korea surged as a result of the stronger market.
LG Chem, South Korea’s largest petrochemical maker, paid a premium of about $14 a tonne to Japan quotes on a cost-and-freight (C&F) basis for naphtha with 75% paraffin content scheduled for Jan. 25 to Feb. 6 arrival at Daesan.
LG Chem was also looking to buy another cargo with 70% paraffin content for second-half February arrival at Daesan but the details were not clear.
The petrochemical maker had paid a high single-digit premium on Dec. 10 for naphtha scheduled for second-half January delivery.
KPIC, on the other hand, bought naphtha with a 77% paraffin content for first-half February delivery at premiums of about $12 a tonne to Japan quotes on a C&F basis.
KPIC had paid a discount of $5.50 to $6 on Dec. 8 for the fuel but scheduled for second-half January delivery.
India’s Bharat Petroleum Corp Ltd (BPCL) has an outstanding tender to sell a naphtha cargo for Jan. 5-7 loading from Mumbai.
It had sold a cargo from Kochi on Friday for late December loading to Glencore at premiums of $21 a tonne to its own price formula on a free-on-board (FOB) basis.
This was a surge versus a premium of $11.50 a tonne BPCL had received for a cargo sold from Kochi to Vitol for Dec. 22-23 loading.—Reuters
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