Inquiries from the East to pull naphtha from the US Gulf Coast increased as end users in Asia were hungry for more of the petrochemical feedstock.
"Everyone and their sister is out for boats [to go] East with naphtha," a USGC shipping source said.
The source added that a vessel has been booked weekly to carry naphtha to Asia's shores over the past two to three months.
With Europe not satisfying Asia's appetite for naphtha, buyers in the East were heard to be setting their sights on US naphtha as supply in the Arab Gulf remained disrupted.
"Asian buyers are willing to pay a premium to take from the Gulf Coast," a USGC blendstocks market source said.
Naphtha supply out of the Arab Gulf was not yet replenished as Aramco's Abqaiq refinery remained under maintenance after the drone attack in September, a source close to the matter said. Market participants said the Saudi Arabian oil giant was seen buying naphtha cargoes for delivery in Asia, although not from the US Gulf Coast.
HIGHEST LEVEL IN SIX YEARS
Cash differentials for FOB Arab Gulf paraffinic naphtha parcels were assessed at their highest level in over six years Friday at a $52/mt premium to the key Mean of Platts Arab Gulf naphtha physical, Platts data showed.
The cash differential was last assessed at this level on February 19, 2013.
The FOB Arab Gulf premium rose Monday to a record and was assessed $2/mt higher day on day to $54/mt, its highest level since Platts began assessing it in January 2005.
The Asian naphtha market was heard to see a fresh wave of demand Friday, as buyers were seeking cargoes for H2 January delivery.
"End users are restocking in Asia," a third source said.
Three South Korean buyers and one Japanese buyer were heard to be seeking naphtha for H2 January delivery. Market sources in the USGC said vessels were booked to carry naphtha to South Korea and Japan's shores.
FRESH FIXTURES RECENTLY HEARD
Three fresh fixtures for the second decade of December loading out of the US Gulf Coast and one out of Mexico were recently heard.
Shell was heard to have fully fixed the SCF Pioneer for a USGC to Singapore voyage, loading December 20, at $2.395 million, according to sources.
The Nautical Deborah, an LR-1 tanker, was heard to be placed on subjects by Vitol to sail a USGC-Far East journey at lump sum $2.45 million, Platts fixture logs showed. A loading date for the vessel was not ascertained.
Valero was heard to have placed an MR tanker on subjects for a USGC to Far East voyage, loading December 13-15 at $1.685 million. Shipping sources said the ship Valero placed on subjects could be the Maersk Tianjin.
Also, on the Monday market opening Valero was heard inquiring for a Medium Range tanker to carry a 38,000 mt naphtha cargo from the USGC to Japan/South Korea loading December 14-16, with a shipowner indicating freight at $1.725 million-$1.75 million for the voyage.
Elsewhere, the Glafkos, an MR tanker, was placed on subjects by BP for a Pajaritos to USGC or Japan voyage, loading December 13, at $1.72 million for a Japan discharge option, Platts fixture logs showed.
NATURAL GASOLINE
S&P Global Platts assessed natural gasoline, C5, at the Enterprise facility at $1.2925/gal Friday, up 1 cent day on day. C5 has averaged a $5/b discount to NYMEX WTI so far this month, strengthening from $8/b a month ago. Similarly, relative to RBOB futures, C5 was last at a 35 cent/gal discount compared with a discount of 47 cents/gal last month.
Light straight run naphtha barges in the USGC were assessed at December natural gasoline plus 5 cents/gal Friday.
Standard and heavy naphtha barges were assessed at barge gasoline minus 22 cents/gal and minus 17 cents/gal, respectively.
Platts pegged the cost of carrying naphtha or gasoline blending components on the US Gulf Coast-Japan/South Korea route at 1.725 million for a 38,000 mt cargo and at $2.45 million basis 60,000 mt on the opening of the market Monday.
