Asia's naphtha crack was at a six-session low of $50.10 a tonne on Thursday as a stubborn glut continued to offset firm demand and weighed on spot prices. South Korea's YNCC bought three cargoes averaging a total of 75,000 tonnes of naphtha for second-half August delivery to Yeosu at discounts of about $3.50 to $4.00 a tonne to Japan quotes on a cost-and-freight (C&F) basis.
This was lower versus the $3 a tonne discount YNCC paid a week ago. The weak fundamentals had drawn YNCC out early this month to seek naphtha under a term deal. Traders said it had sealed the August 2017 to July 2018 deal with more than three sellers at discount in the low single digits to Japan quotes on a C&F basis.
This could not be confirmed as buyers do not typically comment on their deals. Separately, Formosa was in talks to buy spot naphtha for second-half August delivery to Mailiao. The results of the purchase were not immediately clear as the tender's validity is until Friday.
But traders expect Asia's top naphtha importer to buy only a small volume due to scheduled maintenance at its largest of three naphtha crackers next month. They added that Formosa would likely pay a discount of about $5 a tonne for the second-half delivery fuel.
Formosa had paid $2.50 a tonne discount on June 30 for cargoes scheduled for first-half August delivery. Asia's gasoline crack slipped to a five-session low of $9.58 a barrel. Singapore's onshore light distillates stocks surged 17.6 percent or 1.89 million barrels to reach an eight-week high of about 12.65 million barrels in the week to July 12, according to official data.
The data showed close to 193,000 tonnes of gasoline were shipped to Indonesia, down from 257,420 tonnes from last week. China on the other hand had shipped 258,218 tonnes of gasoline to Singapore, up from nearly 186,000 tonnes from the previous week, the data showed.
The higher stock levels contrasted those in the United States, where gasoline stocks fell 1.6 million barrels last week, Energy Information Administration (EIA) data showed. This went against analysts' expectations in a Reuters poll for a 1.1 million barrel gain.