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Asia Naphtha/Gasoline-Naphtha, gasoline margins down

Friday, 12 Oct 2012 | 7:18 AM ET

SINGAPORE, Oct 12 (Reuters) - The Asian naphtha price and margins ended the week at a three-session low of $985 a tonne and $123.03 a tonne respectively to mirror the fall in European values as gasoline demand softened.

Naphtha can be reformed into gasoline.

"The fall in margins today was a reflection of the gasoline market in Europe," said a Singapore-based trader.

Traders added that West African demand for gasoline from Europe were seen weaker and if this persists, it could lead to more naphtha cargoes being pushed to Asia.

The U.S. is also seeing higher gasoline stocks, with total inventories of specially made ultra-clean CARBOB gasoline in California, U.S., having risen to more than 5 million barrels for the first time in four weeks despite production disruption.

Chevron shut a crude distillation unit (CDU) in early August following a fire at its Richmond plant. The CDU will not restart anytime within the next two months.

"The U.S. Gulf Coast light ends supplies are getting less tight and its naphtha prices are falling. They will push out naphtha from mid-November," said another Singapore-based trader.

But for now, tight prompt supplies versus healthy demand in Asia were keeping premiums firm.

South Korea's YNCC has bought around 75,000 tonnes of open-spec naphtha for second-half November delivery at premiums of about $14.00 a tonne to Japan quotes on a cost-and-freight (C&F) basis.

The purchase came a day after Honam had bought similar volumes for November delivery at $13.00-$14.00 a tonne, which were the highest premium seen in South Korea in about 3-1/2 weeks.

Taiwan's Formosa has so far bought two-three cargoes of naphtha feedstock for November arrival at Mailiao for its 2.93 million tonnes per year (tpy) cracking complex, which is currently running at reduced rates. But price details were not available.

* NAPHTHA TENDERS/PRIVATE DEALS: Bahrain National Gas Company (Banagas) has offered a total of nearly 180,000 tonnes of naphtha for January-December 2013 lifting in a tender closing on Oct. 23. Bids will stay valid until Nov. 6.

- The expected number of cargoes, each at 25,000 tonnes, to be lifted during the one-year period were 1 cargo for first quarter, followed by two cargoes each for second-fourth quarter.

- India's Reliance Industries sold 25,000 tonnes of heavy naphtha for Oct. 21-25 loading from Sikka to Itochu, bringing the country's total exports this month to nearly 870,000 tonnes, the highest seen this year.

- Mangalore Refinery and Petrochemicals Ltd sold 35,000 tonnes of mid-November naphtha to Unipec at about $39-$40 per tonne above Middle East quotes on a free-on-board (FOB) basis.

GASOLINE CRACKS AT 6-SESSION LOW

Asia's gasoline cracks dived 11.02 percent to reach a six-session low of $10.42 a barrel reflecting higher stocks in the West.

Gasoline inventories held independently in the Amsterdam-Rotterdam-Antwerp (ARA) hub jumped 17 percent to 754,000 tonnes, boosted by imports from Finland, France, Spain, Sweden and the UK. Gasoline cargoes departed for Canada, Ireland, Mexico, Nigeria and the United States.

Over in Asia, however, fundamentals were mostly strong.

Formosa may reduce its gasoline exports in November by up to two medium-range cargoes as it has shut a secondary unit following a leak.

This came at a time when Vietnam was struggling with supply disruption after its only plant shut in mid-week following a glitch at a gasoline-making unit.

Saigon Petro was the first among the Vietnamese retailers to have secured a total of 20,000 tonnes of gasoline because of the plant trouble.

It bought 10,000 tonnes of 95-octane gasoline for prompt Oct. 18-22 lifting from Singapore at premiums of $3.50-$4.00 a barrel and another 10,000 tonnes of the same grade for Oct. 26-30 loading from Singapore at premiums of about $2.00-$2.20 a barrel.

The price formula is based on Singapore quotes on a FOB basis.

* SINGAPORE CASH DEALS: Four deals, with three on gasoline.

- Arcadia sold a 95-octane gasoline cargo for Oct. 30 to Nov. 3 loading to Shell at $129.20 a barrel.

- It has also sold a 92-octane gasoline cargo to Gunvor for Nov. 7-11 loading at $125.60 a barrel.

- BP sold a 92-octane gasoline cargo for Nov. 1-5 loading to Trafigura at $125.10 a barrel.

- On naphtha, Mabanaft sold a first-half December/first-half March spread deal to BP at $30 a tonne.

LIGHT DISTILLATES CASH ($/T) ASIA CLOSE Change % Prev RIC Chang Close OSN Naphtha CFR Japan M1 985.00 -4.50 -0.45 989.50 OSN Naphtha CFR Japan M2 971.50 -3.50 -0.36 975.00 OSN Naphtha Diff 13.50 -1.00 -6.90 14.50 Naphtha Netback FOB Sing 106.89 -0.50 -0.47 107.39 Naphtha Diff FOB Sing 1.64 -0.05 -2.96 1.69 Naphtha-Brent Crack 123.03 -2.92 -2.32 125.95 Gasoline 97 131.90 -2.10 -1.56 134.00 Gasoline 95 129.18 -1.72 -1.31 130.90 Gasoline 92 125.35 -1.50 -1.18 126.85 Gasoline crack 10.42 -1.29 -11.0 11.71 SWAPS ($/T) ASIA CLOSE Change % Prev RIC (0830 GMT) Chang Close Brent M1 114.94 -0.20 -0.17 115.14 Naphtha CFR Japan M1 970.50 -6.50 -0.67 977.00 Naphtha CFR Japan M1/M2 9.50 0.50 5.56 9.00 Naphtha CFR Japan M2 961.00 -7.00 -0.72 968.00 Naphtha Japan-Sing Netback M1 10.65 -1.10 -9.36 11.75 Naphtha Japan-Sing Netback M2 13.75 -1.15 -7.72 14.90 Naphtha FOB Sing M1 106.65 -0.60 -0.56 107.25 Naphtha FOB Sing M1/M2 1.40 0.05 3.70 1.35 Naphtha FOB Sing M2 105.25 -0.65 -0.61 105.90 Naphtha Cracks M1 -8.16 -0.58 7.65 -7.58 East-West Naphtha M1 -6.00 0.00 0.00 -6.00 East-West Naphtha M2 7.25 1.00 16.00 6.25 NWE Naphtha M1 976.50 -6.50 -0.66 983.00 NWE Naphtha M1/M2 22.75 1.50 7.06 21.25 NWE Naphtha M2 953.75 -8.00 -0.83 961.75 Crack NWE Naphtha-Brent M1 -8.97 -0.69 8.33 -8.28 Crack NWE Naphtha-Brent M2 -8.89 -0.54 6.47 -8.35 *Sing refers to Singapore

(Reporting by Seng Li Peng, editing by William Hardy)

((lipeng.seng@thomsonreuters.com)(+65 6870 3086)(Reuters Messaging: lipeng.seng.reuters.com@reuters.net))

Keywords: MARKETS ASIA/NAPHTHA GASOLINE