More European naphtha seen into Asia

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Apr 2008

At least 200,000 tonnes of European naphtha were expected to arrive in Asia in June as weak demand in the West was encouraging arbitrage activity to Asia. Benchmark open-spec naphtha contracts for first-half June fell to $991.25 a tonne from $996.25 in the previous session. The crack against Brent for first-half June was at $117.65 a tonne, slightly rising from $116.35 a tonne. European oil trader Vitol booked a tanker to ship 60,000 tonnes of naphtha from Europe to Asia for May 6, only a day after Glencore booked a long-haul tanker called Agathanissos to ship 75,000 to 80,000 tonnes of naphtha to Asia on May 3.
Last week, Vitol had booked another April 28-loading tanker to move 60,000 tonnes of European naphtha to Asia. "The sudden rise in arbitrage activity is a relief to the European market which is showing a lack of demand from petrochemical and gasoline sectors," a trading source said.
Asian open-spec naphtha fetched about $29.25 a tonne more than European cargoes as of Monday, up from low $20.00s last week. Traders generally see a price difference of more than $30 a tonne as arbitrage opportunities for West-East naphtha open.
"Even if the spread is not that favourable, it makes sense to ship the cargoes to Asia as European ones are being distressed and valued at deep discounts," said a Seoul-based trader. At least two other Western traders were seeking tankers for first-half of May, the trader added.

Source: Economic Times