Tight supply supports Asian naphtha on closed arbitrage CFR Japan naphtha hits seven-year high




Closed arbitrage supported
the Asian naphtha market, but low olefin margins and tight supply from the West
contributed to weakening demand. On the week, the
benchmark naphtha C+F Japan cargo rose by $23.375/mt- $23.385/mt to $842.50/mt-
$842.60/mt at the Asian close on February 7, an increase that was influenced by
higher crude oil futures. The last time
the cargo was higher, it was $850.375/mt- $850.380/mt on Sep. 30, 2014. The CFR Japan naphtha physical cracked against front-month
ICE Brent crude oil futures widened $12.575/mt- $12.580/mt to $148.30/mt-
$148.50/mt at the Asian close on February 7. Naphtha demand has been affected by low olefin margins,
which have forced steam crackers to operate below their full capacity. At $257.50/mt-$270.60/mt, the breakeven level for
non-integrated...