Naphtha recovers to an almost three-week high

Asia’s naphtha crack rose to an almost three-week high of $8.60 a tonne on Tuesday as concerns over Middle East tensions lingered following last week’s attacks on tankers, one of which was carrying the fuel to Taiwan.

– But the current naphtha margin has already lost 86.7% of its value when compared to this year’s peak in March at almost $65 due to recent surplus supplies.

– Traders said expectations of South Korea’s LG Chem restarting a mega-scale cracker in Daesan by June 18 had also given the market some support.

– But it could not be confirmed if the petrochemical maker had restarted the unit which can produce close to 1.3 million tonnes a year of ethylene, a building block for plastics.

– Lower overall amounts of naphtha coming to Asia may have also helped, with Refinitiv Oil Research pegging the total naphtha flow into Asia at up to 5.2 million tonnes in June, down by 400,000 tonnes from May.
Source: Reuters (Reporting by Seng Li Peng; editing by David Evans)