Asia's naphtha crack fell to a five-month low of $77.65 a tonne on Thursday, dragged down by ample supplies and firm oil prices as Brent crude hit its highest since December 2014. Falling prices of alternative liquefied petroleum gas (LPG) and unplanned shutdowns of crackers in South Korea, although brief, added to the weak fundamentals.
LPG, also used for heating, was about $80 cheaper than naphtha on Wednesday compared to $16.50 lower than naphtha at the start of the year. Demand this week could not offset the bearish factors, with sellers seen releasing cargoes at even lower premiums than last week.
South Korea's YNCC for instance paid a premium of about $4 a tonne to Japan quotes on a cost-and-freight (C&F) basis for an average of 75,000 tonnes for first-half March delivery to Yeosu. This was one of the lowest premiums it had paid through a purchase tender since September.
Hanwha Total bought an average of 50,000 tonnes of naphtha, also for first-half March delivery but to Daesan at the same premium as YNCC at $4. Malaysia-based Titan has also locked in a March cargo at a slight premium. Unipec had also bought a cargo but for second-half February arrival at Caojing at premium around the mid-teen level. India's Bharat Petroleum Corp Ltd has postponed the validity of an outstanding tender to sell 30,000 tonnes of naphtha for February from Mumbai to January 29 from January 25.