Asian naphtha cracks embarked on a recovery trend in most parts of the week, tracking the improvement in buying interest for first-half August parcels from South Korea and Japan buyers.

A handful of buyers are still expected to come out next week for more of their first-half August requirements, one source said, adding the market remains in single-digit premiums mostly.

The better economical incentive for steam crackers to buy naphtha instead of propane could also prop up the market soon, though it would depend on how much buyers have stocked up for propane earlier, one trade source said.

Meanwhile, sellers are likely to keep their offers high in the near-term, buoying prices further.

Gains were capped by some market cautiousness on how cracker runs would pan out after the maintenance season given the slightly squeezed margins.

On the gasoline side, while regional demand stayed mostly dismal, the emergence of some unexpected RFCC outages provided support. Refining margins GL92-SIN-CRK for the motor fuel surged by more than $1 a barrel week-on-week to close slightly above $5.50 a barrel.

One southeast Asia refiner sought for prompt octane-95 deliveries of up to 15,000-20,000 metric tons.

A separate northeast Asian refiner also had issues at its residue fluid catalytic cracker (RFCC) since the start of the week and is expected to resume production only next week.

NEWS

– Japanese Prime Minister Fumio Kishida is set to announce another extension of gasoline subsidies until the end of this year, public broadcaster NHK reported on Friday.

SINGAPORE CASH DEALS

– One gasoline deal, no naphtha deal.

INVENTORIES

– U.S. crude oil, gasoline and distillate inventories fell last week, the Energy Information Administration said on Thursday as crude exports rose.

– Gasoline exports out of ARA storage picked up on the week, according to Insights Global’s Lars van Wageningen, with rising shipments to the Americas recorded, in addition to flows for rarer destinations South Africa and Australia.

– Hengyuan Refining Company Bhd expects an unplanned shutdown of its long-residue catalytic cracking unit (LRCCU) to impact its revenue, the company said in a bourse filing late on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shreya Biswas)