SINGAPORE, Sept 19 (Reuters) - Asia's naphtha price was at a
two-session low on Monday due to lower Brent crude prices, but
cracks hovered around a three-week high on persistent healthy
demand on the back of tighter supplies.
Gunvor has provisionally booked around 75,000 tonnes of
naphtha from Tuapse, Russia, to arrive in Asia between late
October and early November to capitalise on healthy demand for
heavy naphtha, traders said on Monday.
Another seller could be working on moving around 80,000
tonnes of Skikda splitter naphtha for October arrival in Asia.
"Tuapse naphtha is of heavy grade, and that can fetch around
$14.00-$15.00 a tonne premium from South Korea versus
$5.00-$6.00 a tonne for open-spec grade," said a trader.
European refiners are cutting runs or conducting maintenance
work to cope with squeezed margins due to firm crude prices.
Reuters models showed refining margins have been negative
across Europe, with some complex refineries in Northwest Europe
just about breaking even.
Even the most profitable gasoline margins have collapsed
from almost $12 a barrel at the start of September to trade
near the $2 a barrel mark late on Thursday.
This will continue to limit European barrels coming to Asia,
which had in 2010 received an average monthly of 330,000 tonnes
of Western naphtha.
Expectations of lower supplies are to offset weaker demand
in Taiwan.
Formosa Petrochemical Corp has not restarted its 700,000
tonnes per year (tpy) No. 1 naphtha cracker as expected, likely
due to ongoing repair work.
"The market is now dictated by demand for heavy naphtha
rather than open-spec grade. Formosa prolonging its shutdown may
have limited impact on sentiment," said a trader.
Heavy naphtha is usually used to produce aromatics.
Gasoline cracks edged up marginally to reach a nearly
two-week high due to tight prompt supplies in Asia caused by
strong demand in the region.
"Refinery maintenance in India could have impacted
supplies," said a trader.
India's Essar has a refinery maintenance scheduled to run
from Sept. 18 to Oct. 23, while MRPL has a maintenance at crude
distillation unit (CDU) from August to September.
* SWAPS OUTRIGHTS (CFR Japan): October and November swaps
recovered $5.63 and $6.25 respectively to $964.38 and $959.50 a
tonne.
* EAST-WEST SPREADS (The differential between CFR Japan
swaps and Northwest Europe swaps): Asia's October swaps were
$5.00 a tonne higher than Northwest European values, unchanged
from the previous session.
* SWAPS CRACKS: Discounts on crack spreads for November
narrowed $2.22 to $5.06 a barrel to Brent crude.
* JAPAN OPEN-SPEC NAPHTHA NAF-1H-TYO: The price for
front-month first-half November fell $11.00 to $973.00 a tonne.
* BACKWARDATION/CONTANGO: The intermonth spread
backwardation between first-half November and first-half
December stayed at $6.00 as tonne for the third session.
* CRACK SPREAD NAF-SIN-CRK: Cracks for first-half November
-- the profits or losses of refining Brent crude into naphtha --
inched up 47 cents to $135.40 a tonne premium, highest since
Aug. 26 at $138.20 a tonne.
* NAPHTHA TENDERS: India's Bharat Petroleum Corp Ltd (BPCL)
sold a total of 210,000 tonnes of naphtha for third-quarter
lifting from Mumbai to Matrix and Marubeni.
- First time buyer Matrix, a joint-venture between BPCL and
Germany's Mabanaft, bought one of the six 35,000-tonne cargo at
premiums of about $20.00 a tonne to Middle East quotes on a
free-on-board (FOB) basis.
- Marubeni picked up the remaining 5 cargoes for October to
December lifting at premiums of about $19.50-$20.50 a tonne.
- Pakistan's ARL and NRL sold a total of 257,500 tonnes of
naphtha for a six-month loading period starting in September to
Vitol at premiums of about $1.30 a barrel to Singapore quotes on
a free-on-board (FOB) basis.
* REFORMING MARGINS: Gasoline's premium to naphtha
GL92-SIN-DIF eased 28 cents to $17.97 a barrel.
* GASOLINE CRACKS GL92-SIN-CRK: Cracks -- premiums/losses
obtained from refining Brent crude into gasoline -- edged up 3
cents to $12.02 a barrel, highest since Sept. 7 at $12.82 a
barrel.
