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Asia's naphtha crack fell sharply on Tuesday to a near two-month low of $30.58 a tonne as demand for the feedstock was countered by ample supplies. South Korea's SK Energy bought heavy full-range naphtha for first-half March arrival at premiums of $4 to $5 a tonne to Japan quotes on a cost-and-freight (C&F) basis.

This came a day after Hanwha Total bought a similar grade of naphtha for the same delivery period at premiums in the range of $2 to $3 a tonne, traders said.

The prices were not independently confirmed as buyers do not typically comment on their deals.

Japan's Idemitsu was also looking to buy naphtha for first-half March arrival but at Tokuyama.

South Korea imported nearly 25 million tonnes of naphtha in total in 2018, a record high, according to a weekly report by Refinitiv.

One reason for the high imports last year could be strong demand for heavy full-range naphtha to replace condensates in splitters as naphtha was cheaper while condensates were in short supply.

South Korea has however resumed Iranian condensate imports. But overall cracker capacity in South Korea is set to rise as LG Chem and Hanwha Total will raise their crackers' capacity. Malaysia's Petronas said its RAPID refinery has achieved start-up status and is expected to be ready for commercial operations by the fourth quarter of this year.

Copyright Reuters, 2019


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