Asia's naphtha cracks for second-half June hit $60.38 a tonne on Tuesday, the lowest front-month value since December 14 while the gasoline crack fell to a nearly two-month low of $8.70 a barrel as heavy gasoline stocks weighed, traders said. Depending on its grade, naphtha is a blending component for gasoline, as well as being a petrochemical feedstock.

High gasoline stockpiles would lead to sellers needing to sell off excess naphtha. "The weakness in naphtha is coming from gasoline," said a Singapore-based trader. Although gasoline stocks independently held at the Amsterdam-Rotterdam-Antwerp (ARA) hub fell, the impact was offset by high inventories in the United States and Singapore. Gasoline inventories in ARA fell 7 percent in the week ending April 28 to 1.09 million tonnes, data from Dutch consultancy PJK International showed.

Taiwan's CPC has bought naphtha for June delivery to Kaohsiung. It paid between a $4 and $7 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis for the full-range naphtha grade but the premium levels for the heavy grade were not immediately clear, traders said. "This is quite a good premium," said a second Singapore-based trader.

CPC may have previously paid less than $3 a tonne premium for naphtha delivering in May. Kuwait Petroleum Corp (KPC) was looking to buy 25,000 tonnes of 91-octane grade gasoline for May 15-17 delivery through a tender closing on May 3. It was unclear if the tender was a result of additional demand or that it was reissued as KPC was looking to buy a cargo of the same grade for May 12-14 delivery through a tender which had closed.

Copyright Reuters, 2017