Asia's naphtha crack extended gains to a reach near two-month high of $95.05 a tonne on Tuesday, supported by an easing supply glut. Firmer demand caused by a lack of cheap alternative feedstock liquefied petroleum gas (LPG) and possibly fewer European and Mediterranean naphtha cargoes arriving in Asia in September were seen pushing the value up, traders said.
This was reflected in spot prices. South Korea's Lotte Chemical, for instance, bought naphtha for second-half September delivery at a discount of 75 cents to a discount of $1.00 a tonne to Japan quotes on a cost-and-freight (C&F) basis, traders said.
The estimated price level was sharply higher than rival LG Chem paid on Monday for a cargo delivering in the same second-half September period at a discount of around $2 a tonne. India's Bharat Petroleum Corp Ltd (BPCL) has offered a total of 70,000 tonnes of low-aromatic grade naphtha in two equal parcel sizes for September 2-4 and September 11-13 loading from Mumbai through a tender closing on August 6.
Kuwait Petroleum Corp (KPC), on the other hand, has sold 50,000 tonnes of full-range naphtha for August 19-20 loading but details were not clear.
Traders said the cargo could have gone to an oil major at premiums of around $13 a tonne to Middle East quotes on a free-on-board (FOB) basis. This was above the high single-digit premium KPC fetched previously for a second-half July cargo. Taiwan's CPC Corp has offered 30,000 tonnes of 92-octane grade gasoline cargo for August 20 to September 30 loading from Kaohsiung through a tender due to be awarded on August. 7.
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