Asia's naphtha crack slipped to a two-session low of $91.80 a tonne, weighed down by higher Brent crude and largely muted demand from South Korea as no open tenders were seen this week. Taiwan's Formosa Petrochemical Corp on the other hand has bought around 100,000 tonnes of naphtha for second-half September delivery to Mailiao where it operates three crackers with a total capacity of 2.93 million tonnes of ethylene a year.
But the discount at about $7 a tonne to Japan quotes on a cost-and-freight (C&F) basis surprised traders as it was deeper than expected. "The price sealed is low. This means that there are still ample supplies out there," said a Singapore-based trader. Some traders had in the previous session expected the deal to be sealed at discounts between $5 and $6 a tonne. Formosa, Asia's top naphtha importer, has not been buying as much naphtha for August and September delivery compared to February to July.