Asia's naphtha front-month, second-half December price was $5.50 a tonne higher than the following month, making this the highest backwardation since June 15. Backwardation reflects a strong market where contango reveals a weak market. Contango describes a market where front-month prices fall below the following month.
Demand has remained brisk, the Malaysia's based Titan seeking naphtha for December 16-25 arrival at Pasir Gudang through a tender closing on November 13. The petrochemical maker has been regularly buying naphtha, with the most recent purchase made on a cargo scheduled for first-half December arrival at a low single-digit discount to Japan quotes on a cost-and-freight (C&F) basis.
This came a day after South Korea's KPIC and Lotte Chemical have each bought naphtha for second-half December delivery. Traders said KPIC had paid about $2 a tonne premium to Japan quotes on a C&F basis while Lotte forked out flat to $1 a tonne premium. Formosa, Asia's top naphtha importer, has also wrapped up purchases for December cargoes. It bought about 100,000 tonnes for second-half December arrival at Mailiao at a low single-digit discount.
CPC aims to restart the RFCC on December 1 at its earliest, although that would be subjected to authorities' approval. Singapore onshore light distillates, which comprise mostly gasoline and gasoline blending components, edged up 1.14 percent, or 120,000 barrels, to reach a three-week high of 10.630 million barrels in the week to November 11, official data showed.
Byco Petroleum Pakistan Ltd Aims to cut Pakistan's reliance on oil product imports by nearly 65 percent once it ramps up operating rates at its new refinery, now the country's largest, a senior company official told Reuters. The company started operations at the 120,000 barrel-per-day (bpd) refinery - manufactured in Britain and assembled in Pakistan - in June this year next to its 35,000 bpd refinery in the Balochistan coastal area.