The Asian naphtha crack touched a two-session low of $30.18 in its first day of trading Friday on higher supplies and amid low volumes as most traders had yet to come back from new year holidays. At least three sale tenders for up to a total of 61,500 tonnes of naphtha for mid- to second-half January loading from Haldia and Kochi by India's Bharat Petroleum Corp Ltd and Indian Oil Corp would be awarded next week.
Traders are expecting spot prices to stay low due to persistently high supply and sufficient quantities of alternative feedstock liquefied petroleum gas (LPG) made available to petrochemical plants in the West during the winter season. Traditionally, petrochemical plants in Europe would ditch LPG for naphtha as prices of the former, also used for heating, become expensive.
Prices of propane, one of two key LPG products, released by Saudi Aramco for January delivery plunged 23 percent to $425 a tonne compared to December. Naphtha cargoes that had been sold out of India for January 2015 loading from various domestic ports averaged close to $6.50 a tonne on a free-on-board (FOB) basis, reflecting an 80 percent plunge in value when compared to the average for January 2014 at about $34, Reuters data showed. India's federal government increased on Thursday excise tax on gasoline by two rupees per litre, its third such increase since November. State oil giant Saudi Aramco has suspended plans to build a $2 billion clean fuels plant at its largest oil refinery in Ras Tanura, including a naphtha hydrotreater, three industry sources said.
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