Asia's naphtha cracks recovered to a four-session high of $88.93 a tonne on Monday, supported by expectations that paraffinic naphtha supply would stay comparatively tight due to demand from the petrochemicals sector. Naphtha cargoes provisionally booked for April arrival in Asia from the West, including Europe and the Mediterranean, were seen around 1 million tonnes, based on trade sources' estimates.
These were similar to volumes seen for March arrival. Traders do not expect the volumes to grow much more. "The western cargoes coming in during April would again be lagging demand by perhaps 200,000 tonnes to 300,000 tonnes," said a Singapore-based trader.
Traders said last week's weakness in the naphtha market was due mostly to high gasoline stockpiles in Europe and the United States about two weeks ago, although there was a drawdown in stocks last week. Depending on the grades, naphtha can be a blending component for gasoline apart from being a feedstock for petrochemicals. Sinopec Shanghai Petrochemical Co Ltd will shut a 160,000-barrel-per-day crude distillation unit and a 700,000-tonne-per-year ethylene unit for maintenance in April. The exact duration was not given. The PBF Energy Inc said it was assessing the impact on operations from a fire that broke out in a gasoline unit at its refinery in Toledo, Ohio early on Sunday.