Asia's naphtha crack jumped 11.3 percent to a nine-week high of $66.65 a tonne on Friday, supported by an unexpected strength in gasoline but spot prices of the petrochemical feedstock remained at discounts. South Korea's Lotte Chem has snapped up naphtha, which can also be used as a gasoline blendstock depending on the grades, at discount of $1.50 to $2.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis.
The cargoes are for first-half September delivery to Yeosu and Daesan. Lotte Chem had previously paid a steeper discount of $4 a tonne on July 11 for cargoes delivering in second-half August. "The naphtha market took a sudden turn and became stronger," a Singapore-based trade source said. Asia's gasoline crack rose for the fifth straight session to hit a three-month high of $11.62 a barrel in response to tight supplies. Traders said there could be unexpected supply disruptions happening at a North Asian exporter facility but this could not be independently confirmed.
But stocks levels were lower than a year ago in the regional hubs of Asia and Europe. Gasoline stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) storage hub edged up 1.4 percent tonnes to 808,000 tonnes in the week to July 20.
But the current level was 40 percent lower than inventories a year ago, data from Dutch consultancy PJK International showed. Singapore's onshore light distillates stocks at 11.68 million barrels in the week to July 19 was 15.7 percent lower compared to a year ago when they were at 13.86 million barrels. This came after a sharp draw in US gasoline stocks.