The Asian naphtha price was at a 10-month high of $1061 a tonne on Thursday while its margin was close to a year high of $175.03 a tonne as the stubborn supply crunch pushed the crack up for the seventh straight session. The strong fundamentals were caused by low Indian exports and heavy refinery maintenance against limited petrochemical ethylene unit maintenance in Asia this year.
The heavily lop-sided supply-demand equilibrium prompted South Korea's Lotte Chemical to fork out about $36.50 a tonne premium on a cost-and-freight (C&F) basis for 25,000 tonnes of naphtha scheduled for second-half March delivery to Daesan. Despite this being the highest premium in South Korea for many years, traders said the value was below the market rate of $42 a tonne onwards. Lotte Chemical's purchase followed Japanese Itochu's purchase of a 35,000-tonne March naphtha cargo from India's MRPL at about $68 a tonne premium to Middle East quotes on a free-on-board (FOB) basis. That was a record deal for India.
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