July 2, 2012 / 12:48 PM / 5 years ago

Asia Naphtha/Gasoline-Naphtha margins slip further

SINGAPORE, July 2 (Reuters) - Asia's naphtha margins eased
by about 5 percent to reach a three-session low of $51.10 a
tonne premium on Monday as demand uncertainties returned to dent
traders' confidence. 
    South Korea's Honam bought around 25,000 tonnes of naphtha
for first-half August arrival at Yeosu port at about $2 a tonne
above Japan quotes on a cost-and-freight (C&F) basis, the
highest premium seen in the country in a month. 
    But in Taiwan, demand was less clear, with CPC shutting its
380,000 tonnes per year (tpy) No. 4 cracker early in the week
and will only restart the unit around mid-July. Its other
500,000 tpy cracker is operating at about 90 percent of its
capacity. 
    This leaves only two of five naphtha crackers in operation
this week in Taiwan, as Formosa's two of three crackers remained
shut. 
    "Naphtha market has been volatile since two weeks ago," said
a trader, who added that it was hard to find a clear direction
of where the market was heading in the longer-term. 
    Prices were now momentarily lifted by limited European
exports to Asia due to refinery run cuts. An ongoing oil strike
in Norway has also affected sentiment, as Norwegian oil
production has already been cut by about 13 percent. 
  
    But how long this could last remained a concern. 
    Although Formosa's No. 2 cracker resumed operations last
week following an outage, its No. 1 unit was still under planned
maintenance until late July while its No. 3 cracker would
restart on July 10. 
    In addition, Asia's top naphtha buyer will be taking down
the No. 2 unit on Aug. 15 as planned for a 20-day maintenance. 
    Traders were divided as to whether or not Formosa would need
spot cargoes. 
    "They have been deferring cargoes for some time, some of
which will likely be delayed to September arrival. Given that, I
doubt they will need to buy spot for August/early September,"
said a trader. 
    
    GASOLINE CRACKS 
    Gasoline margins edged down less than 1 percent to $4.68 a
barrel premium as fundamentals remained unchanged. 
    Taiwan's CPC is expected to start up a new gasoline-making
unit this month but for now, demand from Asia, including India
was still largely healthy. 
    Singapore cash market saw two deals being done for gasoline
but none on naphtha.
    Gunvor sold a 92-octane gasoline cargo for July 24-28
loading to Glencore at $100.90 a barrel, while Trafigura sold a
92-octane gasoline cargo for July 28 to Aug. 1 loading to Vitol
at $101.10 a barrel. 
    In Russia, Gazprom Neft will shut a gasoline-making unit at
its Moscow refinery this month and output of its 95-octane and
92-octane grades will be affected. 
    Separately, Algeria's state oil company Sonatrach has issued
a tender to buy 480,000 tonnes of gasoil and 270,000 tonne of
premium unleaded gasoline for delivery between August and
December in a tender closing next week. 
 
    
 LIGHT DISTILLATES                                                                
 CASH ($/T)                     ASIA CLOSE  Change  % Change  Prev    RIC
                                                              Close   
 OSN Naphtha CFR Japan M1           773.50   22.50      3.00  751.00  NAF-1H-TYO
 OSN Naphtha CFR Japan M2           772.00   22.50      3.00  749.50  NAF-2H-TYO
 OSN Naphtha Diff                     1.50    0.00      0.00    1.50  <NAF-TYO-DIF
 Naphtha Netback FOB Sing            83.72    2.50      3.08   81.22  NAF-SIN
 Naphtha Diff FOB Sing                0.17    0.05     41.67    0.12  <NAF-SIN-DIF
 Naphtha-Brent Crack                 51.10   -2.40     -4.49   53.50  <NAF-SIN-CRK
 Gasoline 97                        105.77    2.17      2.09  103.60  GL97-SIN
 Gasoline 95                        104.30    3.10      3.06  101.20  GL95-SIN
 Gasoline 92                        101.00    3.30      3.38   97.70  GL92-SIN
 Gasoline crack                       4.68   -0.02     -0.43    4.70  <GL92-SIN-CR
                                                                      >
                                                                                  
 SWAPS  ($/T)                   ASIA CLOSE  Change  % Change  Prev    RIC
                                (0830 GMT)                    Close   
 Brent M1                            96.32    3.32      3.57   93.00              
 Naphtha CFR Japan M1               772.00   22.00      2.93  750.00  <NACFRJPSWMc
                                                                      >
 Naphtha CFR Japan M1/M2             -1.00    0.00      0.00   -1.00  <NACFRJPSDMc
                                                                      >
 Naphtha CFR Japan M2               773.00   22.00      2.93  751.00  <NACFRJPSWMc
                                                                      >
 Naphtha Japan-Sing Netback M1       18.25   -0.95     -4.95   19.20  <NAPTC4SPDMc
                                                                      >
 Naphtha Japan-Sing Netback M2       19.25   -1.85     -8.77   21.10  <NAPTC4SPDMc
                                                                      >
 Naphtha FOB Sing M1                 83.75    2.55      3.14   81.20  <NAFOBSGSWMc
                                                                      >
 Naphtha FOB Sing M1/M2               0.00   -0.10   -100.00    0.10  <NAFOBSGSDMc
                                                                      >
 Naphtha FOB Sing M2                 83.75    2.65      3.27   81.10  <NAFOBSGSWMc
                                                                      >
 Naphtha Cracks M1                  -10.43   -0.87      9.10   -9.56  <NACFRJPCKMc
                                                                      >
 East-West Naphtha M1                13.13   -1.12     -7.86   14.25              
 East-West Naphtha M2                17.75    2.00     12.70   15.75              
                                    758.88   23.13      3.14  735.75  <NAPCNWEAMc1
 NWE Naphtha M1/M2                    3.63    3.13    626.00    0.50  <NAPCNWEASMc
                                                                      >
 NWE Naphtha M2                     755.25   20.00      2.72  735.25  <NAPCNWEAMc2
 Crack NWE Naphtha-Brent M1         -12.40   -1.09      9.64  -11.31  <NAPCNWEACMc
                                                                      >
 Crack NWE Naphtha-Brent M2         -12.27   -1.16     10.44  -11.11  <NAPCNWEACMc
                                                                      >
 *Sing refers to Singapore                                                        
 
 (Reporting by Seng Li Peng; editing by James Jukwey)

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