The benchmark CFR Japan naphtha crack against ICE Brent futures is hovering at close to a five-month low this week amid faltering demand for both light and heavy grades and strength in underlying crude markers.
The crack value of CFR Japan physical naphtha on a 45-60 days forward delivery basis against March ICE Brent futures stood at $83.825/mt at Wednesday's close and at $83.550/mt Tuesday, S&P Global Platts data showed.
It was lower on August 28 last year at $83.350/mt.
The cracks for the second line trading cycle hit a two-year high of $122.95/mt November 10 when North Asian buyers rushed to buy naphtha ahead of year-end holidays, before slumping in early January as demand for gasoline blending waned.
Front-month ICE Brent futures have averaged $69.41/b over the past five trading sessions in Asia, up sharply from $62.59/b over the first half of November, narrowing the cracks margin.
Two sources said North Asian naphtha buyers had adopted a wait-and-see approach at present as they had no real requirements ahead of scheduled turnarounds.
In Japan, Tosoh Corp.'s naphtha-fed steam cracker in Yokkaichi and Showa Denko's naphtha-fed steam cracker in Oita, and in South Korea GS Caltex's naphtha splitter in Yeosu, are due to undergo annual maintenance around March.
