Asia’s naphtha spot activity was slightly thin as some buyers stayed away after covering a portion of their demand up to March, but a lack of lower-priced sellers buoyed prompt prices and widened the market’s backwardation.

At least two South Korean refiners had cleared their requirements late last week for up to first-half March naphtha at the end of last week.

Uncertain run rates for March regionally and rising arrivals in both February and March weighed on the market, though some earlier concerns of conflict in the Red Sea delaying arrival cargoes from the Middle East buoyed cracks in the late afternoon back to above $100 per metric ton on Monday.

There were worries of some prompt short covering demand for February emerging soon if some Western cargoes from Europe fail to arrive in Singapore, though buyers are still hesitant for now, one source said.

Discussions for arrivals in southeast Asia remained at premiums of $20-30 per metric ton for February, with some sellers saying discussions for northeast Asia were almost similar.

On an export basis from the Middle East, offers were coming in at premiums of $40-50 to free on board (FOB) Middle East prices for February shipments.

Meanwhile, gasoline cracks were almost unchanged but February activity turned slightly brisk after some refiners started to enter sales discussions in line with earlier expectations.

Taiwan’s Formosa Petrochemical kickstarted its February offers for at least two lots of the motor fuel and some high octane blendstocks.

Markets were mixed on February and March outlooks, given that demand from some regions were still tepid during the winter seasonal lull – evidenced from the ready sellers in the open trading market since last week, one source said.

NEWS

– Indonesia is targeting 12.5 million kilolitres consumption of unblended biodiesel made from palm oil this year, energy and mining minister Arifin Tasrif said on Monday.

– Oil prices edged up on Monday as traders watched for supply disruption risks in the Middle East following strikes by U.S. and British forces to stop Houthi militia in Yemen from attacking ships in the Red Sea.

SINGAPORE CASH DEALS

– One gasoline deal, no naphtha deal.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)