Asia's naphtha rose as its physical crack discount narrowed for the fourth straight day on Thursday to 40 cents a tonne to Brent crude, making this the smallest discount since it flipped into the negative zone last week for the first time in over 10 years. Industry sources said impact of a Ruwais-origin naphtha cargo bound for Taiwan being affected by fire on a tanker has limited impact as of now due to surplus supply.

Taiwan's CPC said tanker Front Altair, carrying 75,000 tonnes of naphtha was "suspected of being hit by a torpedo" around 0400 GMT. The vessel, owned by Norway's Frontline, had loaded the petrochemical feedstock from Ruwais in the United Arab Emirates (UAE), according to trade sources and shipping data on Refinitiv Eikon. CPC said the incident will not affect its oil products and petrochemical supplies.

Open-specification naphtha and full-range prices had mostly turned to discounts although heavy full-range naphtha prices are still holding at premium levels in South Korea, the largest importer of naphtha as a country in Asia. Malaysia-based Titan for instance secured a cargo on Thursday for second-half July arrival at Pasir Gudang at discounts in the high single-digit a tonne level to Japan quotes on a cost-and-freight (C&F) basis, industry sources said.

Copyright Reuters, 2019