Asia's naphtha crack was at a two-session high of $114.80 a tonne on Thursday, only 0.6 percent shy of a 5-1/2 month high hit on May 22, supported by strong demand. Premiums for July spot cargoes in South Korea have gone above $15 a tonne, compared with premiums in the low single digits during the same period last year.
South Korea's KPIC paid premiums of about $16.50 a tonne to Japan quotes cost-and-freight (C&F) for naphtha scheduled for delivery in the first half of July, traders said. This came a day after Hanwha Total, LG Chem and Japan's Showa Denko were also buying naphtha for the first half of July. Malaysia-based Titan also bought a cargo on Thursday for first-half July delivery at Pasir Gudang, with traders estimating premiums to be in the low-teen level to Japan quotes C&F.
The deals could not be confirmed because buyers do not typically comment on their trades. Formosa, Asia's top naphtha importer, was also looking to buy cargoes for arrival in the first half of July at Mailiao through a tender with offers to stay valid until May 25. Premiums for Indian cargoes were also on an upward spiral, with cargoes mostly sold above $30 a tonne.
BPCL sold up to 40,000 tonnes of naphtha to Gunvor for June 19-20 loading from Kochi at premiums of about $36 a tonne to the refiner's price formula on a free-on-board (FOB) basis. This was the highest BPCL has fetched for a cargo sold out of Kochi since 2014. Traders said Gunvor also picked up a 35,000-tonne cargo from MRPL for June 15-17 loading at premiums of about $34 a tonne to Middle East quotes FOB. This was the highest price fetched since it sold a cargo for July 6-8 loading in 2014.
Reliance, meanwhile, sold 75,000 tonnes for loading in the second half of June at premiums above $30 a tonne to Middle East quotes FOB, traders added. These deals could not be independently verified. Asia's crack slipped 1 cent to $9.64 a barrel with lower stocks seen in Singapore, though the rise in US inventories was unexpected. Singapore onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, fell 4.2 percent, or 608,000 barrels, to a two-week low of 13.88 million barrels in the week to May 23, official data showed.