NEW DELHI: Asia’s naphtha refining profit margin dropped on Tuesday as markets fretted over the impact of persistently high prices, stemming from the Russia-Ukraine crisis, on cracking demand.

The crack slumped $41.33 to $171.65 per tonne, and the inter-month time spread narrowed in backwardation to $29.50 a tonne. Volatility in crude oil markets prompted front-month naphtha prices to ease below $1,000 for the first time since March 2.

“Steam cracker operators from the wider Asia-Pacific area have been shunning naphtha cargoes lately, allowing the price to come off from the recent spikes,” consultancy JBC Energy wrote in a note. India’s state-owned refiner MRPL offered 25,000 tonnes of reformat for delivery in April.

China’s daily oil processing rate dropped 1.1% in the first two months of 2022 from a year ago, to the lowest since December 2020, as independent refiners scaled back operations after Beijing slashed their crude oil import quotas.