The Asian naphtha crack tumbled to a 27-month low of $50.28 a tonne on Monday as muted spot demand and a persistent supply overhang weighed heavily on sentiment. Indonesia offered an 80,000-barrel naphtha cargo for December 10-11 loading from Plaju and another 80,000 barrels for December 19-20 loading from the same port in a tender, which traders said was rare.
Indonesia also offered a 200,000-barrel naphtha cargo for December 5-6 loading from Balikpapan, also through a tender closing on November 12. Supplies to Asia from Europe and the Mediterranean were expected to stay high due to reduced demand and better-than-expected refinery runs in the West, traders said. Maintenance at petrochemical crackers including Repsol Tarragona, Shell Moerdijk and Total Antwerp was freeing up naphtha feedstock in Europe.
Traders will push the excess naphtha to Asia given that it was structurally short. But too much volume had been moved over since September, causing an excess in Asia to build. "The naphtha market is in bad shape," said a Singapore-based trader in reference to the high supplies.
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