Asian naphtha values rose on Tuesday following crude gains, while a tighter supply picture bolstered the crack spread, traders said. Benchmark open-spec naphtha contract for first-half January was quoted at $551.25 a tonne, on a cost-and-freight (C&F) basis, compared with $547.50 on Monday.
The time spread between the first halves of January and February was $1.75 a tonne in contango. The ICE Brent/naphtha crack - naphtha's premium against Brent crude - extended its gains to $97 for first-half January, a significant jump from $55 at the end of September.
December Singapore naphtha swaps were valued slightly higher at $58.80 a barrel against Monday's $58.40 on a free-on-board (FOB) basis. The time spread between December and January flipped back to parity from a 10-cent backwardation. "Supply surplus is minimising as prompt cargoes and short term ones mostly were delivered," said a Seoul-based trader.
South Korea's Yeochun Naphtha Cracking Centre has not yet concluded its negotiations with suppliers to buy naphtha for 2007 supplies, after its term tender had closed last Friday.