Asia's naphtha physical crack for first-half September recovered on Thursday after easing in the previous day and was now at a seven-month high of $119.60 a tonne due to strong demand and tighter supplies. More than 220,000 tonnes of naphtha were locked in through tenders by buyers this week for first-half September delivery. Formosa for instance bought late Wednesday 100,000 tonnes of open-specification naphtha for first-half September arrival at Mailiao at about $8 a tonne premium to its own price formula on a cost-and-freight (C&F) basis.
This was higher than the $4.50 a tonne it paid on July 10 for cargoes delivering in second-half August, but still sharply lower than the $15 a tonne it paid in May. South Korea's GS Caltex also picked up naphtha in the previous session for first-half September delivery at premiums of about $14 a tonne to Japan quotes on a C&F basis.
Hanwha Total also bought on Wednesday at premiums of at least $15 a tonne to Japan quotes on a C&F basis, just two days after it bought for the same period. Other buyers in the market include China's CNOOC and Taiwan's CPC. Asia's gasoline crack eased 3 percent from a near two-month high from the previous session to a two-session low of $8.08 a barrel.
Traders said the recent hike in gasoline crack was more to reflect stronger demand in the West rather than in Asia where supplies were ample. Singapore onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, for instance, were at a four-week high of 14.7 million barrels in the week to July 25, official data showed. Gasoline stocks in the US however fell 2.3 million barrels, compared with expectations in a Reuters poll for a 713,000-barrel drop.
Gasoline exports from Europe to North America had increased sharply in recent days and are now expected to reach around 1.3 million tonnes in July, according to shipping data and traders.
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