Asia's naphtha crack more than doubled from the previous session to $18.20 a tonne on Wednesday, the highest since May 23, as demand rose and crackers returned to operation or started up. Malaysian state oil company Petronas and Saudi Aramco have started operations at their new 1.2 million tonne per year naphtha cracker.
Naphtha was imported this month specifically for the cracker, they added. South Korea's LG Chem in the meantime has restarted its 1.27 million tpy naphtha cracker following an unexpected shutdown more than a week ago. Hanwha Total has also started up its cracker after a prolonged shutdown which started at the end of March.
On top of this positive news for sellers, buyers emerged this week to buy spot and term cargoes.
Japan's Mitsubishi Chemical bought naphtha earlier this week for second-half July delivery at discounts in the low single digit a tonne level to Japan quotes on a cost-and-freight (C&F) basis, industry sources said.
They added that Asahi Kasei Mitsubishi Chemical had also bought naphtha this week but for second-half August delivery at a slight discount a tonne level on a C&F basis, pegged to a 60-day pricing formula instead of the usual 30 days.
A Chinese buyer and Southeast Asian buyer were separately looking to lock in term naphtha cargoes.
Japan's Cosmo Oil has shut its sole 86,000-bpd No.6 crude distillation unit (CDU), along with other facilities, at the Yokkaichi refinery on Saturday due to power outage in the region. Power has returned and Cosmo is preparing to sequentially resume operations of the facilities.
Indonesia's Pertamina said it was extending negotiations by another three months with Saudi Aramco on the potential joint development of oil refinery Cilacap.