Asia's naphtha fundamentals were strong as tight supplies against firm demand lifted Indian spot premiums to levels not seen since 2015. India's Mangalore Refinery and Petrochemicals Ltd (MRPL) on May 9 sold 35,000 tonnes of naphtha for June 1-3 loading from New Mangalore to Japanese trading house Petro-Diamond at premiums of $29 or slightly more to Middle East quotes on a free-on-board (FOB) basis.
This was the highest premium MRPL has received in about three years since it sold a cargo for May 2015 loading. Reliance also sold a naphtha cargo for early June loading, which traders said went to Trafigura at premiums of more than $30 a tonne to Middle East quotes on an FOB basis. Similar to MRPL, this was the highest premium Reliance has fetched since 2015.
Separately, Oil and Natural Gas Corp has offered 35,000 tonnes of naphtha for June 8-9 loading from Mumbai and 30,000 tonnes of the fuel for June 5-6 loading from Hazira in two separate tenders which will close on May 16. Bids for both tenders will stay valid until May 17.
Buyers were to reply to ADNOC by May 11 on whether or not they would accept offers for four naphtha grades scheduled for July 2-18 to June 2019 delivery at $22 to $25 a tonne premium to the refiner's own price formula on a free-on-board (FOB) basis.
In Brazil, Braskem will soon start to negotiate a long-term contract to buy naphtha from its shareholder Petroleo Brasileiro, which currently sells 7 million tonnes of naphtha to the former annually.
Asia's gasoline crack ended the week at a one-month high of $7.32 a barrel, lifted by a sharper-than-expected drawdown in key market US inventories last week.
But higher crude prices could bite as policymakers turned to raising pump prices to cope.
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