Asia's naphtha crack fell to a 2-1/2-week low of $91.10 a tonne on Thursday, weighed by falling demand for the fuel as a gasoline blending component in Europe and higher availability of prompt cargoes, traders said. Europe exports naphtha to Asia among other regions. A fall in demand for naphtha as a gasoline blendstock could lead to higher volumes of naphtha being exported out of Europe. Taiwan's Formosa Petrochemical, Asia's top naphtha importer, paid a discount of about $2.00 to $2.50 a tonne to its own price formula on a cost-and-freight (C&F) basis for about 130,000 tonnes of naphtha for second-half October delivery to Mailiao.

This compares with a discount of $1.50 a tonne Formosa had paid on August 31 for 100,000 tonnes of the fuel scheduled for first-half October delivery. India's Mangalore Refinery & Petrochemicals Ltd (MRPL) sold 35,000 tonnes of naphtha for September 28-30 loading from New Mangalore to Vitol at premiums of about $2 a tonne to Middle East quotes on a free-on-board (FOB) basis.

This was four times lower than the $8 a tonne MRPL had previously fetched from Itochu for a cargo loading on September 20-22. India's Reliance has sold 55,000 tonnes of naphtha for October 12-14 loading from Sikka at premiums of about $11 a tonne to Middle East quotes on a free-on-board (FOB) basis, traders said.

Reliance has previously sold similar volumes for October 6-9 loading but the premiums were not known. Japan's naphtha imports in August at 1.24 million tonnes were at its monthly highest since April, official data showed. Singapore's onshore light distillates stocks, which comprise mostly gasoline and blending components for the fuel, fell about 4.3 percent to a near 2-1/2-month low of 11.23 million barrels in the week to September 13, official data showed.

The data also showed that Singapore had shipped nearly 35,000 tonnes of gasoline to Mexico in the week ended September 13, official data showed. This brought Singapore's shipment of gasoline to Mexico in three straight weeks to nearly 140,000 tonnes as the latter likely had to source for the fuel after Hurricane Harvey struck the US Gulf Coast in late August. Gasoline stocks in the United States were also down after it saw the largest draw on record last week. There seven gasoline deals totalling 350,000 barrels, making this the highest traded volume in a single session since September 4.

Copyright Reuters, 2017