Asia's naphtha physical crack dropped 9.7 percent to a 2-1/2 week low of $104.58 a tonne on Tuesday, its biggest percentage loss since June, while the gasoline crack hit $8 a barrel, its highest since July 31. A trader said recent operational issues surrounding Shell's refinery and petrochemicals site in Singapore could have been a reason behind the stronger gasoline value although this could not be independently confirmed.
A Shell spokeswoman said operations at the Pulau Bukom site in Singapore were progressively returning to normal after an "external utility issue". The Singapore site houses Shell's 500,000 barrels per day (bpd) refinery and a cracker that produces more than 900,000 tonnes a year of ethylene using naphtha as one of its feedstocks.
A stronger US gasoline market has also lifted the Asian crack value as its stockpiles were projected to have fallen last week by 1.4 million barrels, a preliminary Reuters poll showed. But Asia is still expected to grapple with ample supplies in the longer term. Vietnam's Nghi Son oil refinery, for instance, is seeking approval to export oil products due to high inventories and limited domestic demand as buyers already hold existing import contracts.
Demand emerged from South Korea, with Hanwha Total buying heavy full-range naphtha through a tender for second-half September delivery to Daesan at premiums below $13 a tonne to Japan quotes on a cost-and-freight (C&F) basis, traders said. This was lower than the $15 a tonne premium it had been paying for cargoes arriving in the first half of September. Japan's Asahi Kasei Mitsubishi Chemical bought on Monday a naphtha cargo for second-half September delivery at premiums in the high single-digits a tonne to Japan quotes on a C&F basis, but this was pegged to a 45-day pricing formula instead of the usual 30 days, traders said.
India's Hindustan Petroleum Corp Ltd (HPCL) sold its first naphtha cargo from Vizag this year to BP but the price details were not known. The small cargo of up to 20,000 tonnes is scheduled for August 19-24 loading.