Asia's naphtha crack dived 12.3%, or nearly $10, on Monday to a two-month low of $70.93 a tonne amid production cuts by petrochemical producers. Faced with persistently high naphtha premiums but weak demand for plastics, naphtha crackers from North Asia to Southeast Asia have reduced throughput by about 5% to 10%.

Spot deals were mostly muted due to the cuts, but naphtha spot prices may not fall as quickly as buyers are hoping. Based on one trader's estimate, the average market premium for cargoes scheduled for second-half February arrival in Japan would still cost at least $19 a tonne on a cost-and-freight (C&F) basis versus a single-digit premium a year ago.

High oil prices, coupled with refinery maintenance in the Middle East, are likely to prevent a drastic drop in naphtha spot premiums in the short term.

India's BPCL cancelled on late Friday a tender to sell 35,000 tonnes of naphtha for Jan. 18-19 loading from Kochi, but issued a new tender to sell a similar volume for Jan. 26-27 loading from the same port.