Asia's naphtha crack hovered around a three-month low of $89.83 a tonne on Monday as a stubborn supply glut weighed heavily on sellers' sentiment. The weakening fundamentals have battered spot prices further.
Indian Oil Corp Ltd (IOC) for instance sold on Friday up to 30,000 tonnes of naphtha for February 14-16 loading from Dahej to Lukoil at a premium of about $6.15 a tonne to its price formula on a free-on-board (FOB) basis.
This was the lowest premium IOC has received for a cargo sold out of Dahej in about 13 months while it was Lukoil's first Indian spot purchase in about nine months, Reuters data showed.
IOC and its buyers do not comment on their deals.
"I think we have seen the rock bottom, especially where there are not that many cargoes arriving in the East from the West. Such low prices might draw buyers out again," said a Singapore-based trader, who expects the bad times for sellers to turn better soon.
Weak prices in Asia have choked off west-to-east trades for now as traders would rather sell the cargoes in Europe than move the barrels to the East.
As Asia is structurally short of naphtha, any moves to curb flows would cause supplies to tighten.
Although European refineries, benefiting from strong margins, increased crude oil processing in December by 2.4 percent from November, their naphtha output has slipped, official data showed. Strong gasoline margins could have prompted the European refiners to focus on maximising the motor fuel yield over naphtha, although this could not be independently verified.