Asia's naphtha crack rebounded from a near three-month low on Tuesday, climbing for the first time in two weeks to $105.70 a tonne on stronger long-term demand and expectations of fewer western cargoes arriving in March. South Korea's YNCC and Taiwan's CPC are in talks to buy naphtha, with the former seeking 100,000 tonnes over a 12-month period starting in April and the latter looking for 700,000 tonnes over a 10-month delivery period.
"The current spot market is weak with prices at discounts. YNCC is likely aiming to get a discount steeper than their existing term at $3 a tonne (to Japan quotes on a cost-and-freight basis) but not many sellers are offering," said a North Asian trader. YNCC has an existing 12-month contract sealed in August 2015 which expires in September this year. At least one more buyer is looking for term cargoes but no other details were available.
Some sellers were hoping that western naphtha coming to Asia in March would be more limited following a record high of 2.2 million tonnes for January arrival and at least another 1.7 million tonnes booked for February arrival.