Asia's gasoline crack reached a four-session high of $11.56 a barrel on Tuesday, buoyed by weaker Brent crude prices, while the naphtha crack reached a three-session high of $107.70 a tonne on strong demand. South Korea's LG Chem has bought naphtha for delivery in the first half of March to Yeosu/Daesan at premiums of at least $9.50 to $10 a tonne to Japan quotes cost and freight (C&F), traders said.
These would be the highest premiums in South Korea since April 2015. "The offers are in double-digit premium figures as supplies are limited," one North Asian trader said, adding that any deals done would be no lower than $10 for cargoes delivering to Daesan.
Fewer cargoes coming to Asia from Europe and the Mediterranean, as well as a lack of affordable alternative feedstock to replace naphtha, have contributed to the tightly supplied market.
This month's fire at Ruwais, Abu Dhabi, has also caused supply to shrink because it may not have restarted a secondary unit, traders said.
Kuwait Petroleum Corp (KPC) sold 50,000 tonnes of full-range naphtha to India's Haldia Petrochemicals for February 5-6 loading at premiums of $16.50 to $17.00 a tonne to Middle East quotes free on board (FOB).
This was more than double the $6 a tonne premium KPC had received for a January cargo.