The Asian naphtha price fell for a fourth day on Thursday to an eight-month low of $897 a tonne, although its margin rose slightly from low levels. The margin at $93.69 a tonne was still down 30 percent from a month ago as some petrochemical firms have reduced demand for naphtha after switching to a rival feedstock and trimming operating rates at their units.
"The overall cracking margins are mostly narrowing and liquefied petroleum gas (LPG) prices are falling. These have caused the market to turn bearish when compared to before," a Singapore-based trader said. LPG can be used to replace 5 to 15 percent of naphtha feedstock in some Asian naphtha crackers, including those operated by top Asian naphtha buyer Formosa.
Spot deals were mostly muted after purchases earlier this week from Malaysia-based Titan and South Korea's Lotte Chem. Although Formosa last week bought up to 100,000 tonnes of naphtha for first-half May arrival, traders said its spot demand may this month be slow compared with its February and March purchases at more than 200,000 tonnes each. ADNOC kept up its offers for three naphtha grades lifting May 2013 to April 2014 at record premiums of above $34 a tonne to its own price formula on a free-on-board (FOB) basis.