Asia’s naphtha spot activity in the trading window stayed upbeat as markets awaited more spot buying from some steam crackers soon, despite shaky downstream production margins.
More procurement activities for the second half of March and April were expected to emerge soon in the next few trading sessions – though buyers remained on the cautious side given the worries of limited petrochemical demand.
Margins for steam crackers however have improved slightly in the past few weeks so some users will still have to come into the market for their regular procurement, one source said.
Meanwhile, two buyers are expecting spot prices to still remain at single digit premiums in the near-term.
Refining margins for the petrochemical feedstock (NAF-SIN-CRK) started the week weaker at $87.25 per metric ton.
Some support came from the gasoline markets, given that reforming margins have gained to $14 per barrel, improving since two weeks earlier.
In gasoline markets, refining margins climbed to a two-month high of $9 a barrel (GL92-SIN-CRK) amid rising gasoline futures in the west following a slapping of Trump tariffs on Canada, Mexico and China.
Some traders were monitoring the flows of gasoline and blendstocks exports from China to the United States as well as possibly lowered gasoline production in the United States, given higher feedstock costs and difficulty in crude procurement from Canada and Mexico.
However, ample supplies in the west remained a key bearish market driver in the near-term, one blendstocks trader said, adding that the current U.S. gasoline futures price structure shows the cautiousness on May and June outlooks.
Some gasoline blendstocks are still flowing from Asia to the U.S. because of the earlier bullish outlooks, a second source added.
Expectations of some prolonged supply disruptions in Southeast Asia, ahead of the refinery maintenance season, contributed further to the gasoline price firmness.
SINGAPORE CASH DEALS
– One naphtha deal, one gasoline deal
NEWS
– U.S. President Donald Trump’s trade tariffs on Canadian and Mexican oil imports will offer European and Asian refineries a competitive advantage against their U.S. rivals, analysts and market participants told Reuters.
– Oil prices jumped on Monday after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China, raising fears of crude supply disruption from the two biggest suppliers to the U.S., but the prospect of lower fuel demand capped gains.
– The new tariffs imposed by U.S. President Donald Trump on imports from Canada, Mexico, and China are likely to have a limited near-term impact on global oil and gas prices, Goldman Sachs said in a note on Sunday.
Source: Reuters