Asia's naphtha crack was at a two-session high of $67.28 a tonne, supported by firm demand from North Asia, while the gasoline crack was a two-week high of $10.47 a barrel with a sharp drawdown in inventories in the Singapore hub. Eyes were also on Formosa as it had to trim runs at its 540,000 barrels per day Mailiao refinery following technical issues at one of three crude units.
It will shut the said CDU for repairs but no firm dates have been set. Formosa was looking to buy naphtha for June arrival at Mailiao through a routine tender. Traders however said Formosa, Asia's top naphtha importer, may have agreed with sellers to pay a premium of $2 to $3 a tonne to Japan quotes on a cost-and-freight (C&F) basis for the fuel, but this could not be independently confirmed as the tender has not expired officially.
Formosa had on April 26 bought about 130,000 tonnes of the light fuel at premiums of $4 to $5 a tonne to Japan quotes on a cost-and-freight (C&F) basis. Chinese buyers CNOOC and Unipec were also in the market seeking naphtha, traders said. South Korea's Hanwha on the other hand has paid a premium of $6 to $6.50 a tonne for naphtha arriving in Daesan in second-half June, but the grade of the fuel was not known.
Japanese chemical maker Tosoh Corp will invest about $88 million to upgrade its 527,000 tonnes-per-year naphtha cracker in Yokkaichi by 2020 to improve efficiency. With the upgrades, Tosoh would be able to use a smaller amount of naphtha to produce the same quantities of ethylene. Qatar has offered about 25,000 tonnes of 95-octane grade gasoline for June 22-26 loading from Mesaieed through a tender closing on May 16, with bids to stay valid until May 17.
Qatar does not regularly export gasoline. Singapore light distillate stocks fell 8.4 percent, or 1.113 million barrels, to reach a 4-1/2 month low of 12.2 million barrels in the week to May 10, official data showed. The data was in line with the United States, where gasoline inventories fell last week by 150,000 barrels, compared with analysts' expectations in a Reuters poll for a 538,000 barrel-drop. Exxon Mobil Corp has reached an agreement to buy a refining and petrochemical plant owned by Jurong Aromatics (JAC) in Singapore.