Asia's naphtha cracks fell for the sixth session on Wednesday, its longest losing streak in nearly three months as demand from South Korea and Taiwan could not counter persistent oversupply. The crack value for the second half of August slumped 10.2 percent, or $4.35, to a 1-1/2 year low of $38.28 a tonne, with sellers expecting the glut to last through the third quarter.
The weak fundamentals dented spot prices for sellers, with South Korea's Lotte Chemical having bought naphtha for second-half August delivery at a discount of about $6 a tonne to Japan quotes on a cost-and-freight (C&F) basis. This was the lowest price paid in South Korea since May 11. Formosa, Asia's top naphtha importer, bought less than 100,000 tonnes of the fuel for second-half August delivery at discounts of around $7 a tonne to Japan quotes on a C&F basis, traders said.
This was lower than discounts of $4 to $5 paid by Formosa on June 15 for 100,000 tonnes of naphtha for second-half July delivery. It was also the lowest Formosa had paid since March 11. "Naphtha will be harder to trade with new splitters coming up and competition from liquefied petroleum gas (LPG)," said a Singapore-based trader. There are new condensate splitters in South Korea, Taiwan and Qatar.
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