Asia's naphtha crack edged up less than 1 percent to $73.58 a tonne but it was less than half the value for the same period a year ago at $169.95 a tonne, reflecting the weak state of the market, traders said on Thursday. Persistent high stocks were pressuring prices and the crack value, they added.
Faced with a slump in naphtha prices and high freight rates for large vessels, some traders have taken the rare step of splitting shipments into two smaller tankers to save costs, traders said. "But it's not just naphtha. Cracks are down for most oil products. At this rate, there could be refinery run cuts in Asia soon. Perhaps in September or October," said a Singapore-based trader.
Asia's gasoline crack, although still out shined the rest of the oil products, was at $14.41 a barrel, down from multi-year highs at $19.40 a barrel on June 17. Singapore's onshore light distillates stocks, which comprise mostly gasoline and gasoline blendstocks, climbed 208,000 barrels to a five-week high of 12.26 million barrels. India's Mangalore Refinery and Petrochemicals Ltd (MRPL) sold 55,000 tonnes of naphtha for August 28-30 loading from New Mangalore to Itochu at a premium of about $16 a tonne to Middle East quotes on a free-on-board (FOB) basis.
This was similar to the mid-teens a tonne premium MRPL had fetched for an August 7-9 cargo sold to Total. Two gasoline deals but none on naphtha. Vitol sold to PetroChina a 92-octane grade cargo for August 7-11 loading at $70.58 a barrel but the European trader bought a similar grade cargo for the same loading period from Hin Leong at a premium of 80 cents a barrel. This is the second time this year that Hin Leong has sold a gasoline cargo in the Singapore cash market, with the first done on July 6.