Asia's naphtha cracks edged up for a third day on Thursday to reach a four-session high of $53.13 a tonne on strong demand and the easing of a supply glut. The stronger fundamentals were reflected in spot prices, for which discounts have been contracting since last week.
Buyers including Asia's top purchaser Formosa, Malaysia-based Titan and South Korea's YNCC were forking out more this week for cargoes scheduled for February delivery versus January delivery, traders who track the naphtha market said. Taiwan's Formosa had paid levels between parity and a discount of $1 a tonne to its own price formula on a C&F basis.
This is higher than the discount of around $4 a tonne Formosa had forked out on Dec. 13, Reuters data showed. Titan paid a slight discount on Thursday for naphtha scheduled for first-half February arrival at Pasir Gudang, traders said. This was again higher than around a mid-single-digit a tonne discount to Japan quotes on a cost-and-freight (C&F) basis it had paid on Dec. 13.
YNCC paid flat to Japan quotes on a C&F basis for naphtha scheduled for first-half February arrival at Yeosu. This was the most YNCC had paid since July and the fresh spot price sharply contrasted with the discount of $7.50 a tonne it had paid on Dec. 3, Reuters data showed.
All three deals on Thursday totalling more than 150,000 tonnes were not directly confirmed as buyers do not typically comment on their purchases or operations. Taiwan's CPC Corp has wrapped up talks to buy cargoes for March to October 2019 delivery. Trade sources said CPC paid discounts between $1 and $3 a tonne to Japan quotes on a C&F basis for full-range grade and premiums of $17 to $19 for heavy naphtha.
India's MRPL sold 35,000 tonnes of naphtha for Jan. 22-24 loading from New Mangalore but details were unclear. It had previously sold a cargo for Jan. 6-8 at premiums around the mid-teen a tonne level to Middle East quotes on a free-on-board (FOB) basis. Asia's gasoline crack discounts narrowed by more than half to 40 cents a barrel.
Singapore's onshore light distillate stocks, which comprise mostly gasoline and blending components for petrol, fell 8.6 percent or 1.175 million barrels to reach a six-week low of 12.5 million barrels in the week to Dec. 19, data from Enterprise Singapore showed. This contrasted with the US trend, where its gasoline inventories rose by 1.8 million barrels last week versus analysts' expectations in a Reuters poll for a 1.2 million barrel gain.
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