Asia's naphtha crack edged up 30 cents to $34.20 a tonne on Wednesday, after sinking to a three-month low in the previous session, but the current value still reflected a weak market, traders said. The average crack this year up to May 15 close is $50, down 40% from a year-ago period as higher supplies are expected.
Reasons behind the ample supplies included weaker demand due to cracker maintenance season, recent petrochemical unit outage in Japan and high volumes of western cargoes from Europe and the Mediterranean flowing into Asia. The monthly average of western cargoes arriving in Asia for January to May at 1.7 million tonnes are up 8% from the same period last year. Kuwait Petroleum Corp (KPC) has sold 28,000 tonnes of light grade naphtha for June 12-13 loading at premiums in the low teens a tonne level to Middle East quotes on a free-on-board (FOB) basis.
The buyer of the cargo could be an oil major but this could not be independently confirmed as the seller does not typically comment on its deals. It was unclear if the refiner sold any spot cargo for May loading but the current premium is sharply down from more than $20 a tonne Kuwait has garnered for a light grade cargo scheduled for April 27-28 loading.
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