Asia's naphtha crack was at a two-session low of $20.38 a tonne on Tuesday, pressured by ample supplies that have battered the market repeatedly for much of this year. Although supplies to Asia arriving from western origins, such as Europe and the Mediterranean, have been reduced, the market remains saddled with supplies because of cracker maintenance in Indonesia and Taiwan.
Based on data from Refinitiv Oil Research, total naphtha flows to Asia of up to 5.1 million tonnes this month are down from up to 5.3 million tonnes in July. Of this, less than 1 million tonnes are from the West, down 26% from July, the weekly report said. China will add about 10 million tones of paraxylene manufacturing capacity from March 2019 to March 2020, according to company reports and officials. That is enough to make 22 trillion 500 ml plastic bottles.
Paraxylene's main feedstock is heavy naphtha. Asia's gasoline profit margin fell 28 cents to $5.80 a barrel, its lowest since Aug. 2. While exports to West Africa were picking up, demand for European gasoline from the United States was waning.
Analysts estimated that stockpiles of gasoline in the United States are expected to have risen by 100,000 barrels last week, a preliminary Reuters poll showed. Exxon Mobil Corp on Monday said production at its Hibernia oil platform in Canada was shut down after a temporary loss of power on Saturday. Power was restored the same day, but production has not yet resumed, the company said in a statement.