SINGAPORE, Oct 9 (Reuters) - The Asian naphtha price rebounded to a five-session high of $965 a tonne on Tuesday, with the intermonth premium recovering to reach $12.00 a tonne as demand from South Korea returned.
LG Chem has bought 50,000 tonnes of for November delivery to Yeosu. Traders said the 25,000-tonne cargo for first-half November delivery was likely concluded at premiums of $11-$12 as tonne to Japan quotes on a cost-and-freight (C&F) basis.
Another 25,000-tonne cargo for second-half November delivery was done at premiums of $12-$13 a tonne.
Despite the uncertain and mostly gloomy economic outlook, naphtha premiums held up as traders expected a tightly supplied market due to strong liquefied petroleum gas (LPG) prices and firm gasoline demand in the West.
LPG can be used to replace 5-15 percent of naphtha feedstock in some of the Asian crackers while naphtha can be used for gasoline production.
European refiners found it more lucrative to use naphtha to make gasoline to feed the West African market rather than to sell to Asia, which is structurally short.
That helped Bahrain's Bapco to garner record high premiums of $28 a tonne to Middle East quotes on a free-on-board (FOB) basis for its 2013 full-range naphtha shipments.
Kuwait also achieved record premiums of its full-range naphtha for December 2012 to November 2013 lifting at $27 a tonne to Middle East quotes on a FOB basis, and $28 a tonne for its light grade for the same delivery period.
Taiwan's Formosa delayed an estimated 60,000 tonnes of naphtha to November from October after it reduced operating rates at its 2.93 million tonnes per year (tpy) naphtha cracking complex to 80 percent had limited impact on the market.
GASOLINE CRACKS EASE
Asia's gasoline cracks eased to a two-session low of $12.87 a barrel after nearing a two-month high the previous day as high Brent crude put pressure on the margins.
Demand in Southeast Asia and South Asia were healthy with Sri Lanka's Ceypetco seeking 1.56 million barrels of 90-octane gasoline and 125,000 barrels of 95-octane grade for Dec. 1 to May 31 delivery to Colombo.
The tender closes on Oct. 25 and is valid for up to 4-5 weeks.
India's Numaligarh Refinery Ltd (NRL) is seeking 7,000 tonnes of reformate for Nov. 10-25 delivery to Haldia port through state-run Bharat Petroleum Corp Ltd (BPCL).
The tender closes on Oct. 16, with offers to stay valid until Oct. 18.
Pakistan was also out seeking gasoline. It is looking to buy a total of 280,000 tonnes of gasoline for December 2012 to February 2013 delivery in a tender closing Oct. 19.
Offers are to stay valid until Oct. 26.
Separately, Tanzania has bought 92,180 tonnes of gasoline for November-December delivery.
But the strength in the U.S. market could weaken considerably in the coming weeks, as high prices caused by a string of refinery outages alarmed consumers and politicians across California.
* SINGAPORE CASH DEALS: Two deals, one each on naphtha and gasoline.
- SK Energy bought a 92-octane gasoline cargo from BP for Oct. 24-28 loading at $125.40 a barrel.
- Glencore sold a spread naphtha deal to Shell for second-half November and first-half December delivery at $6.00 a tonne.
LIGHT DISTILLATES CASH ($/T) ASIA Chan % Prev RIC CLOSE e Change Close OSN Naphtha CFR Japan M1 965.00 8.00 0.84 957.00 OSN Naphtha CFR Japan M2 953.00 7.00 0.74 946.00 OSN Naphtha Diff 12.00 0.50 4.35 11.50 Naphtha Netback FOB Sing 104.85 0.83 0.80 104.02 Naphtha Diff FOB Sing 1.50 0.00 0.00 1.50 Naphtha-Brent Crack 121.03 -5.4 -4.27 126.43 Gasoline 97 135.95 4.05 3.07 131.90 Gasoline 95 129.00 1.05 0.82 127.95 Gasoline 92 125.40 1.00 0.80 124.40 Gasoline crack 12.87 -0.7 -5.30 13.59 SWAPS ($/T) ASIA Chan % Prev RIC CLOSE e Change Close (0830 GMT) Brent M1 112.54 0.00 0.00 112.54 Naphtha CFR Japan M1 953.50 1.25 0.13 952.25 Naphtha CFR Japan M1/M2 9.25 0.00 0.00 9.25 Naphtha CFR Japan M2 944.25 1.25 0.13 943.00
Naphtha Japan-Sing Netback M1 11.65 1.25 12.02 10.40
Naphtha Japan-Sing Netback M2 13.20 1.25 10.46 11.95
Naphtha FOB Sing M1 104.65 0.00 0.00 104.65 Naphtha FOB Sing M1/M2 1.20 0.00 0.00 1.20 Naphtha FOB Sing M2 103.45 0.00 0.00 103.45 Naphtha Cracks M1 -7.62 0.14 -1.80 -7.76 East-West Naphtha M1 -10.25 0.00 0.00 -10.25 East-West Naphtha M2 2.50 1.00 66.67 1.50 NWE Naphtha M1 963.75 1.25 0.13 962.50 NWE Naphtha M1/M2 22.00 1.00 4.76 21.00 NWE Naphtha M2 941.75 0.25 0.03 941.50
Crack NWE Naphtha-Brent M1 -7.90 0.03 -0.38 -7.93
Crack NWE Naphtha-Brent M2 -8.42 0.11 -1.29 -8.53
*Sing refers to Singapore
(Reporting by Seng Li Peng, editing by William Hardy)
Keywords: MARKETS ASIA/GASOLINE NAPHTHA